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Campus Connection - Managing the budget in difficult times

Article Date: 
27 April, 2012 (All day)

Since 2008 our country, state, and county have been dealing with the longest recession in our history.  The longevity of the crisis has taken a toll on all of us.  Our schools are no exception.

In 2008 the district received $6,740,256 in combined revenue from the state and federal government for our K thru 12 program.  In 2009 we received $6, 971,874 from the same sources.  From 2010 to the present these funds have steadily declined.  In 2013 the projected revenues fell to $5,858,201 creating a deficit of -$1,113,673 when compared to 2009.

In 2008 the district had an enrollment in K-12 of 2187 students and a teaching staff of 117.  In 2012 the district has an enrollment of 2429 students and a teaching staff of 120.5.  We now have more students, a slightly greater staff, and significantly less funding.

The district has focused during this period of time on keeping class sizes manageable through various sources of stimulus money, saved funds, and capital transfers.  Most of these sources have now run their course and the reserves no longer exist.

There are two basic categories of funding in the state system; the Capital Fund and the General Fund.  Capital Funds are earmarked for buildings, land, and upkeep.  General Funds are earmarked for salaries, benefits, supplies, textbooks, etc. Capital Funds are only generated from local property taxes while General Fund revenue is approximately 20% local property tax with the rest coming from state income tax.

In 2010 the state legislature gave districts the ability to transfer Capital Funds (buildings) to the General Fund (salaries and supplies).  The district has done so, with $375,000 being transferred from the Capital Fund to the General Fund in 2010, 2011, and 2012.  The district has judiciously used these funds and presently has a fund balance of $300,000.  The board has authorized the release of $150,000 from this fund balance to help balance the 2012-13 General Fund budget and kept another $150,000 in anticipation of another challenging school year in 2013-14.  The legislation allowing such transfers has now expired.

Many constituents have erroneously assumed that General Fund money has been supplementing Capital Fund money.  This is simply not the case.  Just the opposite has occurred; Capital money has funded the General Fund.

In 2010 and 2011 the federal government awarded the district $882,525 in stimulus money.  These funds went directly to help cover decreased state funding to the General Fund and were expended in 2010, 2011, and 2012.

The State Office of Education and our local board have worked hard trying to walk a tight rope in hopes of the economy picking up and revenues from income tax increasing at sufficient levels to maintain the regular K-12 program.  As we are all well aware, the economy has not cooperated.  While the state legislature in the past session tried hard to increase funding to schools, they we unable to generate enough new income to counteract the damage of the past five years.

The Morgan Board of Education has tentatively approved a series of budget cuts that protect the integrity of the classroom, limit the losses to personnel incomes, and protects the interest of local taxpayers, many of which are also suffering from the economic woes of the present.  We join a number of districts throughout the state facing similar financial challenges. 

The next two school years will be trying ones for all of us.  During the next few weeks we will share in this column specific steps to be taken by the district to balance the 2012-13 budget while serving the needs of students, staff, and community in the best way possible with the limited funds available.