As the current fiscal year nears its halfway point, the Effingham County Board of Education is laying the groundwork for its next budget year.
Superintendent Randy Shearouse gave initial projections for the fiscal year 2014 budget to the school board at its December meeting. The early calculations are for a $3 million deficit between the school district’s revenue ($79.6 million) and expenses ($82.6 million) for the fiscal year from July 1, 2013 to June 30, 2014.
“I caution … don’t get too excited about it because we certainly have a lot of things that could change in this budget,” Shearouse said to board members. “But certainly this gives us a good starting place.”
The many unknowns at this point include the amount of money the school system will receive from local property taxes and from the state’s Quality Basic Education allotment for basic instructional costs. Another variable is the rising cost of health insurance for the district’s non-certified employees, such as custodians and bus drivers.
Effingham County’s tax digest has decreased for three straight years, resulting in less school taxes being paid by county property owners. However, Shearouse is encouraged that the school district has received more revenue this year than last year from people paying past-due taxes.
“There’s no way we can get our crystal ball out and tell totally about tax revenue,” Shearouse said, “but the good news is that we’ve collected about $1.3 million in older taxes this year already. So we do look for some increase in revenue as far as back taxes being paid. Certainly the trend is showing that.”
Along with cutting more than $40 million in QBE funding for Effingham County since 2003, Georgia’s budget woes soon will mean higher insurance costs for many state employees. The Effingham County School District projects insurance premiums for non-certified employees to go up by $150 per month per employee next year, which would add up to a $542,000 increase.
Shearouse said he is aware of several school districts that have considered opting out of the State Health Benefit Plan and outsourcing their health insurance. However, he added, the districts could not find a better deal, and they were deterred by a provision that districts cannot return to the state health plan once they leave it.
“My understanding is a lot of them found they couldn’t find it any cheaper than what we’re currently getting,” Shearouse said. “We’ll look for some other possibilities, but so far it does not appear to be feasible to leave it at this point.”
Slade Helmly, the school district’s executive director of administrative services, added: “I would assume that, if we went to an outsourcing, it would be financially attractive or we wouldn’t consider it. But who’s to say that (initial rate) won’t go up for us as well as retired people covered by that?”
The Effingham County Board of Education used $1.9 million of its Education Special Purpose Local Option Sales Tax funds to make up for a shortfall in this year’s budget, but that likely will not be an option for FY 2014. The district’s E-SPLOST fund balance is projected to be $661,927 at the end of June 2013.
That, Shearouse said, is because the school district plans to allocate E-SPLOST money to priorities such as technology ($475,000), school buses ($400,000) and routine maintenance ($500,000). Also, the school system is setting E-SPLOST funds aside each month for future building projects.
By the end of FY 2013 this summer, the school district will have $3 million saved for construction. Shearouse called it a “smart idea” to set aside money so it will be available when the district needs it for building projects.
“We’ve been fortunate in the last couple years in that we have not had to enter into any big building projects because we haven’t had the growth that we were having at one point,” Shearouse said. “But do any of us believe that’s going to be the case in the years to come? This system will build schools again, and we also have a lot of buildings to maintain and keep up-to-date.”