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Fayette school finances brighten, but $15 million gap remains

The projected June 30 fund balance for the Fayette County School System is growing due to a number of vacated positions not being filled, but the savings now amounting to several million dollars by the end of June will be far from enough to forestall historic cuts in personnel and the possible closure of up to four schools.

A large portion of the projected June 30 fund balance, now estimated at $7 million, comes from continued savings realized by cost-cutting in personnel that began in July. Current figures through January show the school system $1.65 million under budget in salaries and $3.14 million under budget in benefits.

The school system is also $413,431 under budget in the operations portion of the budget. Approximately 91 percent of school system expenditures are in personnel.

Deputy Superintendent Sam Sweat in January said the school system began the year in July with a projected June 30, 2013 fund balance of $800,000. That projection has swelled to what is anticipated to be a June 30 fund balance of approximately $7 million due to cost-saving efforts put in place last summer.

The bulk of the savings come from not filling personnel positions as they become vacant during the school year, according to Sweat and interim Superintendent Dan Colwell.

Colwell said some position vacancies, such as a chemistry teacher, must be filled with a regular hire with benefits. But many others that must be filled can be accomplished by hiring long-term certified substitutes with no benefits. Still other vacant positions can go unfilled for the time being, Colwell said.

A number of other higher paying positions in central office have already been eliminated or consolidated. Central office positions will likely face up to $1 million in cuts. And the school board beginning in March will have to address what is expected to be a total of more than $11 million in total personnel cuts along with more than $3 million that would be saved if four schools are closed.

While ending the fiscal year on June 30 with a fund balance of $7 million or more would represent significant savings, those savings are small in comparison to the projected $15 million that must be cut to adopt a balanced budget in June. The current budget has the school system generating revenues of $163 million and expenses totaling $177 million.

Initial estimates show the school system expecting to generate approximately $162 million in revenues during the school year that begins in July. That figure may have to be adjusted downward if the tax digest, the total value of all real and personal property in the county, falls again this year.

Historic drops in the tax digest over the past few years have contributed significantly to the school system’s loss of revenue. Those drops in value are all the more important considering that the school system receives approximately half its revenue from local property taxes.

The other half of the funding equation, state dollars, have also seen decreases in the past few years. While school systems are quick to point to state-imposed austerity cuts, the reality is that every school system in Georgia receives austerity cuts and is subject to changes in state funding.

That said, there is an aspect of state funding, known as Quality Basic Education (QBE) dollars, that has impacted Fayette County negatively for the past few years.

In terms of QBE dollars, each student generates approximately $4,000 per year to school system revenues. Fayette has lost approximately 2,000 students in recent years leading to a loss of approximately $8 million. Projections are for the school system to lose another 500 students when school begins in August.

Revenue considerations are steering the budget conversation today since the school system can no longer rely, as it has in the last few years, on multiple millions of dollars in available fund balances to balance the budget. Those days are gone. And that is why the historic cuts in personnel and possible school closures are making the news this year.



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