That was part of the bleak budget picture painted for the Board of Education Saturday by Director of Schools Jubal Yennie and finance director Leslie Bonner. Yennie recommended cutting the 24 teaching positions as a start.
“We’re $3 million short by using our savings,” BOE member Randall Jones said during the four-hour budget work session.
“We didn’t try to include anything we didn’t think we needed next year,” Yennie told the board.
Bonner said that based on a Tennessee recommendation to keep 3 percent of its budget in fund balance, also known as unallocated reserves, the system would have about $2,055,044 available to help balance the budget.
In comparison, to balance the current 2012-13 budget, the system took out $2.7 million in reserves and is projected to put back about $1.8 million June 30, Bonner said. Taking out the $2,055,044 from the estimated June 30, 2013, balance of $2,710,786 would leave $2,655,942, or 3 percent of $88,531,413, which includes the $5.8 million nutrition budget to be addressed later.
Operating revenues are projected to be $80,287,845, compared to proposed expenditures of $86,983,277.
That would be a shortfall of $6,695,432 minus the cost of 24 teaching positions at $1.456 million for a shortfall of $5,239,432. The shortfall is higher than it would otherwise have been because of revamped revenue projections that indicated property tax revenues will be flat, along with sales tax, and more-than-expected Basic Education Program revenues.
“You can’t continue to do the same thing with the same amount of money,” BOE member Jerry Greene said.
“There’s no secret we have to find at least $3 million,” Yennie said. “We’re still looking as far away from the classroom as possible” for potential cuts.
BOE member Todd Broughton said the system, projected to lose about 70 students by next fall, should try to draw more students through career technical education and other programs.
Broughton and BOE member Robyn Ivester said career technical education programs, including the new welding and emergency medical technician programs at Central High in cooperation with Northeast State Community College, were a good start, but Jones and Vice Chairman Jack Bales said the system must fashion a workable spending plan for 2013-14.
Yennie recommended letting go of 24 positions, which he said “fall out naturally” and he hopes can be done through attribution. An extra push could come from a possible early retirement incentive board members discussed.
Jones said if the system had 50 retirements and only rehired 25 positions — but at lower entry pay instead of that of more experienced and higher-educated teachers — the system could save $1 million even by helping pay health insurance for the newly retired teachers.
“We’re looking beyond the 24,” Yennie said after the work session. “We may get to the point where we can’t absorb (teachers) through attrition.”
Yennie said he’s also looking at administrative positions in schools and at central office, as well as making more instructional aides part time instead of full time.
Other ideas were to consider contracting out some janitorial or other services.
The state through the Basic Education Program is providing the system about $300,000 toward 1.5 percent state raises, but Yennie said the state is not requiring the money be used in 2013-14. However, the state starting in 2014-15 will require systems to use pay increase money for differentiated pay.
Yennie said he supports extra pay for difficult-to-fill positions, such as special education or foreign language teachers, not based on performance as measured by the state’s new evaluation system. Ivester, a teacher in the Johnson City system, she said opposes the pay-for-performance model, too, because she believes it would kill collaboration among teachers.
Health insurance already is a more than $10 million expense in the draft budget, and Bonner said still an unknown for 2013-14 is the effect of the federal Affordable Care Act on the school system. The act, among other things, requires that employees working six hours a day or 30 hours a week receive health insurance or the employer will face paying a penalty for the employee to get health care elsewhere.
The issue is whether some bus drivers, cafeteria workers and aides working six hours a day, and substitute teachers, some of whom work five days a week, are covered. Bonner said state education officials have not yet given guidance on that issue to local school officials.
The cost to the school system could be $2,000 per employee systemwide if at least 95 percent aren’t covered or $3,000 for each employee not covered if at least 95 percent are covered.
The BOE did not set a time for another work session before its June 3 meeting, although Yennie has talked about having a budget proposal before the County Commission’s Budget Committee June 6.