Because of declining state and local funding, the Effingham County Board of Education anticipates a budget shortfall in the next fiscal year.
However, the school board expects to make up for that deficit with funds left over from the current Special Purpose Local Option Sales Tax for Education (E-SPLOST).
“I think we’re in a whole lot better shape than we anticipated, because of the means to use the E-SPLOST funds – which means we won’t have to have a tax increase,” school board chairman Lamar Allen said.
Although the numbers won’t be finalized until the county completes its tax digest and the state releases its allotment figures, Superintendent Randy Shearouse presented the school board with estimated figures during a budget workshop last week. The board of education hopes to have the budget finalized by July 1.
Projected revenues for FY 2013 are $78,545,040 with projected expenses of $81,243,238, resulting in a deficit of $2,698,198.
Effingham County’s tax digest is expected to decrease for the third straight year, resulting in less school taxes being paid by county residents. The county’s decreasing property values will result in nearly a half-million-dollar reduction in tax dollars for the school system.
“Some house appraisals are coming in at half of what the houses were built for,” Shearouse said.
An even bigger concern is the millions of dollars Effingham County will not receive from the state, despite qualifying for the funding under the Quality Basic Education formula. Designed to provide the basics of instructional costs, the QBE formula is driven by the number of “full-time equivalents” or FTEs, the number of students who are enrolled in each class during the school day.
Last year, Effingham County schools qualified for $8.3 million in QBE funding that it never received due to state budget constraints. Shearouse expects the number to be around $8 million again this year, bringing the total amount of state funding pulled from the budget to more than $34 million since 2003.
“The main concern is just the reduction in state funds, from what we should be earning to what we’re actually receiving,” Shearouse said. “Just as local districts are bringing in less money because of decreases in the tax digest, the state has a lot less revenue that it had several years ago.”
Another budget hit is the increasing price of fuel. The FY 2013 budget includes a $200,000 increase in fuel costs, to more than $1 million for the coming school year.
“That’s the cost we don’t really have a lot of control over,” Shearouse said. “We’re going to run buses, we’re going to pick up kids every day, and we have to pay whatever the fuel cost is.”
That adds up to a nearly $2.7 million shortfall, even at a time when the school district has decreased its payroll for employee salaries and benefits by $1.5 million while reducing its number of employees from 1,740 in 2009 to 1,591 this year. Shearouse said a number of cost-cutting measures have been taken, including increasing class sizes, not replacing some teachers who retired or moved to other school districts, and cutting some central office positions.
“As you look at making reductions everywhere, we have to take our fair share as well,” Shearouse said.
That may sound like a formula for the school district to require furlough days or reduce the number of school days. However, Effingham County will be able to offset the deficit with its surplus funds from the current E-SPLOST –— which is allowed under state law as long as a school district has completed the projects in its E-SPLOST plan and does not have any outstanding debt on a building or bond.
Shearouse expects about $3 million in leftover funds when Effingham County’s current E-SPLOST expires June 30.
“It’s good timing because we can use that money to help keep the millage rate from being a tax increase,” Shearouse said.
The school board is considering increasing the millage rate, which has remained constant at 15.333 for the past three years. School officials say the district could increase its millage to as much as 16.341 without it being considered a tax increase, since the lower property taxes, combined with the millage increase, would not result in the school district increasing its revenue from the current fiscal year.
“Some properties go up (in value) and some go down, but, in the end, you’re bringing in the same amount of dollars – that’s why it’s not considered a property tax increase,” Shearouse said. “You can’t look at one specific property or five specific properties. You really have to look at the big picture of the whole county.”
Since the board of education does not anticipate a tax increase, it is not required to host any public hearings on the budget. However, the public is invited to comment on the budget at the school board meetings at 7 p.m. on May 17 and June 21.