At the Board of Education meeting on Tuesday, June 23, the board adopted a deficit budget for next year even as state funding remains in doubt. The district will make ends meet by drawing down reserves by $3,899,602 and transferring balances between funds. The deficit and reserve draw down is needed despite the inflow of one time federal stimulus funds of $1,927,693 and assumes there are no additional reductions from the state.

The districts total expenses are budgeted to be $73,082,671 for the 2009/2010 school year.
This compares to an estimated actual for the 2008/2009 year of $75,341,392 and $72,061,075 for the 2007/2008 year.

In 2007/2008 not only were all of the district's expenses paid for by receipts for that year, but there was a $6 million surplus. That year ended with a general fund balance of $17,992,018. Thanks to federal stimulus funds received in the 2008/2009 school year, there will also be a surplus for that year of $1,333,428. Thus, after the end of this school year (June 30, 2009) the general fund balance would be $19,325,446.

The adopted budget for the next school year would bring the fund balance down to 15,425,844, but this does not reflect any new budget changes the state comes up with. Since the budget must be submitted to the County Office of Education by the end of the month, the Board of Education had to approve this budget even though there are many unknowns about what the state funding will be. As the state tries to balance its books, nobody expects state funding to go up, so additional budget cuts should be expected.

The budget for next year reflects the spending reductions already implemented by the district, including the cutting of 46 teaching positions and the elimination of a variety of administrative and other positions. The teaching staff reductions represent more than 10% of all teachers employed by the district during the 2008/2009 school year, according to Dr. Gregory Franklin, district Superintendent. Of the total reduction in expenditures for next year of $2,258,721, 87% comes from lower teacher compensation, even though teacher compensation represents only 48% of total expenses. Franklin indicated the disparity is because most of the other expenses are more like fixed overhead.

The savings in total teacher labor costs, at 5.4%, are substantially less than the 10% reduction in teaching staff because of contracted pay rate increases, known as step and column adjustments. The labor contracts are in negotiation and any savings from those talks have not been reflected in the budget.

Franklin said "There might be further reductions in our expenditures in 2009/2010 through negotiated salary reductions, but I don't see us increasing class size again. {i.e. no additional teacher layoffs} I believe they {the unions} want to be part of the solution. I don't know how likely it is we will get them to agree to salary reductions." Franklin said the discussions could go into the summer and "If there's not an agreement to roll back salaries, it could go longer than that."

If the one time federal stimulus funds were removed from the current year's results, the surplus would become a deficit of $1,515,274, and the deficit for the 2009/2010 year would grow to $5,827,295, or 8% of expenditures. Without the federal stimulus funds, the projected reserve balance at the end of next year would shrink from $15,425,844, to $ 10,649,448. Franklin said "I'm concerned that eventually we've got to take care of that, but that's what our reserves are for. I feel blessed that we're in the situation that we can run that deficit this year {2009/2010 school year} while we continue to look for longer term solutions."