ROGERSVILLE — Director of Schools Steve Starnes told the Hawkins County Board of Education Monday it's already getting "a lot of sugar for a nickel," but he'll be needing another 12 cents on the county property tax rate to balance the 2014-15 fiscal year budget.
More than $7 million in savings has been spent over the past five years to balance the Hawkins County school budget.
Starnes told the BOE during a budget workshop Monday that the school system is on an "unsustainable path" without new revenue.
On July 10 Starnes reported to the BOE that the projected 2014-15 budget deficit was a little more than $4 million.
Since then, cuts have been made totaling $1.279 million from the general purpose fund and $160,000 from the transportation fund, leaving the overall deficit as of Monday evening at $2.711 million.
Those latest cuts included 13 teacher positions, six of which were actual layoffs and seven open positions that weren't filled.
Of the six teachers laid off, four were new hires this summer, one had two years experience and one had three years experience. There were also five teaching assistants positions cut, two of which involved layoffs of new hires.
With the new cuts, the school system's general purpose fund deficit currently sits at $2.226 million, while the transportation budget is now $484,630.
Starnes said he believes the transportation deficit can be eliminated with the proposed shift in property tax revenue which increases the transportation department's cut of the school system's overall $1.05 county property tax share from 15 cents to 30 cents.
As for the remaining $2.226 million deficit in the general purpose fund, Starnes told the BOE it should ask the Hawkins County Commission for a 12 cent property tax increase.
A penny on the property tax rate generates $84,339 for the school system. A 12 cent hike would increase revenue by about $1.012 million.
The remainder of the BOE's $1.2 million deficit would be drawn from savings.
At the end of 2011-12, the BOE had a reserve fund balance in excess of $11.7 million.
As of Monday, the BOE's reserve fund balance is projected conservatively at $5.3 million. Starnes said the school system received a bit of good news last week, however, during a visit from the regional fiscal consultant.
The BEP reserve won't be as large this year as it was last year.
It's also looking like some revenues from 2013-14 will be higher than anticipated, and some expenditures will be lower than anticipated.
As a result, the actual fund balance may be between $6 million and $6.2 million when the 2013-14 budget is closed out, which will make another draw of funds to balance the budget a little less painful.
The state requires school boards to maintain a reserve fund of no less than 3 percent of its overall budget, which in the case of Hawkins County Schools is a little more than $1.5 million. Starnes noted that the BOE never wants to let it get that low because it wouldn't have enough cash on hand to pay the bills in the first half of the fiscal year and would end up borrowing money to make its payroll.
Board chairman Randy Collier asked if Starnes has a contingency plan if the 12 cent request is rejected by the county commission.
"It gets real drastic then," Starnes replied. "We balance it again out of the fund balance ... and continue on that unsustainable road and just get nearer and nearer the cliff. There will come a point we can't balance it out of fund balance, and we're fast approaching that."
The County Commission's Education Committee met jointly with the BOE Monday evening. Commissioner Danny Alvis, as well as board member Chris Christian, asked if there were any room for cuts among the system's highest paid employees — the Central Office supervisors.
Starnes sad Hawkins County is already understaffed in Central Office by five supervisors based on state staffing recommendations.
"In looking at our supervisors (former director Clayton Armstrong) used to have a saying — 'In Hawkins County we get a lot of sugar for a nickel,' " Starnes said. "If you look at our supervisors, they're underpaid by about $6,000 regionally. Our principals are very underpaid."
Aside from teacher and teaching assistant cuts and layoffs, other new 2014-15 budget cuts that have taken place since the BOE last met July 10 included $129,901 from the general purpose fund by not filling a math specialist position and a technology coach instructional position; cutting the health services director, Coordinated School Health and the Family Resource Center from 11 months to 10 months; and cutting the Pre-K director from 12 months to 11 months.
Another $61,429 was cut from Title 1 by not filling the Family Engagement Coordinator position, and the school system also cut the travel budget 10 percent across the board.
"I think we'd be hard pressed to fund the entire deficit out of fund balance and be able to continue," Starnes said. "I know a tax increase is never popular, but if you look at the history, it's been since 2005-06 since a tax increase was given for the general purpose fund or transportation side of the budget. ... If I'm not mistaken, during that time period we've also seen 18 percent inflation."
Starnes added, "I want to assure you the cuts we've made to date have not been pleasant whatsoever. They've been very difficult, but we are on an unsustainable path without making some cuts, and without some assistance."
When the board meets in regular session Aug. 5 at Volunteer High School, the BOE will be asked to approve the proposed budget, which includes asking county commission for a 12 cent property tax hike.
Board members said that if they're going to ask for a tax increase, they want to assure the County Commission they've looked at every potential cut.
Starnes also presented the BOE with some additional cuts from athletics totaling $47,673. Among those cuts are freshman coaches and assistant coaches for most high school sports teams, as well as six strength and conditioning coach positions.
Those coach cuts will be presented as an option for approval in the budget Aug. 5.
Collier also asked that a proposal cutting the bonuses that retiring teachers receive for their accrued sick leave also be presented for consideration as part of the budget.comments powered by Disqus