Superintendent Randy Shearouse is optimistic the Effingham County School System will collect a higher amount of local tax revenue this year than last year.
Shearouse expects a “little uptick” in the tax digest this year, which would increase the school district’s revenue from county property taxes. Also, last year the district “over-collected” — meaning it collected more in school taxes than it anticipated — and expects to do the same this year.
Even if neither scenario happens, though, the school district is still on target to balance its revenues and expenses for its fiscal year 2014 budget, according to the projections Shearouse gave at Thursday’s school board meeting.
“To be in a situation where you don’t have to rely on things possibly happening just to balance your budget, is very positive,” said school district finance director Ron Wilson.
The district’s latest estimates for the FY14 budget — which begins July 1 — are $83.2 million in expenses and $82.6 million in revenue, for a shortfall of $620,658. However, that is far less than the $1.9 million deficit originally estimated for FY14 and the nearly $2 million shortfall last year that required a transfer of special purpose local option sales tax funds to balance the budget.
Effingham County received $914,000 this year from the state’s midterm budget adjustment, but the school system did not apply that to its current budget. Rather, the money is part of the general fund balance and can be used to overcome the $620,000 shortfall.
“It looks like it will work out,” BoE Chairman Lamar Allen said. “The public ought to be happy that we don’t have to consider a tax increase.”
The $83.2 million in expenses are a 2.8 percent, or $2.2 million, increase from the FY13 budget.
“Overall, $2.2 million is a big number,” Shearouse said, “but when you start breaking it down and looking at the increased costs, you can see where we are and why we’re there.”
Much of the $2.2 million increase is related to personnel, including $643,585 for step raises owed to teachers for their years of experience. The school board also approved adding new teachers, including an English teacher at each high school to reduce class sizes and an agriculture teacher at Ebenezer Middle so that all three middle schools will now have one full-time.
After previously having to limit expenses for elementary school field trips, the school board included $44,000 for them in the FY14 budget. The school board also is filling teaching positions that had been vacant for Reading Recovery, a program to help first-graders who have difficulty reading.
Another increased expense, according to Shearouse, is the rising cost of health insurance for school district employees. Health coverage for non-certified employees is going up $150 per month per employee, Shearouse said, costing the district an additional $575,000 this year.
Increases in insurance premiums aren’t limited to employees, though. School officials are taking bids for school bus insurance providers, since State Farm plans to stop offering school bus fleet coverage. The school district anticipates a significant rate hike after State Farm stops covering Effingham County’s school buses in February.
“We’re looking at about double, and it’s around $400, $500 per bus now,” said Slade Helmly, the school system’s executive director of administrative services.
“So that’s a pretty big hit,” Shearouse said.
The school district’s FY14 projected revenue of $82.6 million is $1.6 million higher than the figure in the current budget, due largely to Effingham County receiving more equalization funding than anticipated from the state.
School officials initially predicted a $400,000 increase from this year’s $4.7 million in equalization, funding the state provides to lower-wealth school districts. Instead, the state approved a $2.7 million increase for Effingham, to $7.4 million.
“Thankfully, we’ve received the $7 million in equalization,” Shearouse said. “(If we hadn’t), we would be talking a different game and we’d really be relying on those over-collections and the digest at this point, whereas right now we don’t think we have to rely on any of those.”
Shearouse conservatively projects the school district to collect $25.1 million in local property taxes in FY14 — the same figure being used in the current budget. However, that could change if the tax digest reflects an increase in property values.
“We hope that is a little low,” Shearouse said. “There has been some new growth in the county, so we’re hoping that number may edge up a little bit.”
Also helping the bottom line is an increase in grant money the district has secured, from $655,000 this year to $993,259 for FY14.
The public will have two opportunities to comment on the budget, at the May 16 and June 20 board of education meetings. The school board plans to approve the FY14 budget and the property tax millage rate at its June 20 meeting.