A $900,000 cut in state funding and increased costs for health insurance last school year used up all reserve funds and carved a $115,000 deficit for the Commerce Board of Education.
Finance director Ann Stokey told the board Monday night that a plan is under way to eliminate the deficit.
A major part of the plan is the 1.25-mill increase in property taxes, which will bring in substantially more revenue than the shortfall. But Stokey said the system also expects a substantial check from the state at the mid-term adjustment for Early Intervention Program personnel, due to a reworked formula that increases revenue. It has also cut seven 49-percent employees.
As troublesome as the deficit itself is the fact that the system has depleted its reserves after several years of state budget cuts. That means any future budget surprises from Atlanta could require drastic action.
“Our hope is that by cutting all the 49-percenters, not replacing people who leave, with the EIP changes and raising the millage, we can weather the storm,” Stokey said on Tuesday.
As the previous school year started, officials knew they’d use about $700,000 in reserve funds, but hoped to end the year with about $100,000 on hand. Instead, the system got even less money from the state than anticipated, used up all $770,000 of its fund balance and ended the year in a $115,352 hole.
The school system is now required to submit a deficit elimination plan to the state.
“Because we ended in a deficit, but because our deficit is less than what one mill of tax would come up with, we have to come up with a deficit elimination plan,” said Stokey. “And that plan would mean us balancing our budget and making up that $115,000. We will have to cut expenses somehow so that we end up the year at zero.”
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