PERRY — The Houston County school board, pondering next year’s budget, told Superintendent David Carpenter to add, cut and leave be in doing so.
In a special meeting Tuesday at the board offices, Carpenter was asked to fashion a budget for the coming fiscal year that would incorporate cuts, leave the fund balance at no less than $10 million and have up to a 1.5 mill property tax increase.
Stephen Thublin, the assistant superintendent for finance and business operations, gave a snapshot of the system’s finances and said the situation changes almost daily with factors that include the sour national economy, declining local revenues and decisions by the state Legislature now in session.
“I had a different set of figures at 5 o’clock yesterday,” he told board members. “The cuts from the state are going up and down daily.”
The school system is grappling with projected revenues falling short of expectations, he said. Revenue from local taxes are at 43 percent of last year’s levels, at $175,000.
Interest earnings were budgeted at $1.6 million but are about half that, at $850,000; and intangible taxes that were more than $1 million for each of the past six years have dropped to $630,000, he said.
“Our cash is not down, but the interest rate has gone down so hard,” he said. “The historical model is not being followed.”
Since the beginning of the fiscal year, the school system has adjusted revenues and expenditures, but it is facing a nearly $4.5 million deficit that will be covered by its $14.6 million fund balance, leaving that at $10.1 million at the end of the current fiscal year.
Carpenter said he’s asked all department heads to cut expenses whenever they can. He told principals to save at least 10 percent of their school allotment, and he is exploring other options.
“Any money that is saved can be carried over to next year,” he said.
Chairman Tom Walmer said the board is looking at coming up with about $12 million to cover next year’s anticipated deficit, noting that the board has raised the millage rate just once in the past 10 years.
“Of that $12 million, how much are we willing to raise the millage rate or dip into the reserves (fund balance)?” he asked.
“I suggest we raise the rate 1.5 mills and use the fund balance for the rest,” board member Skip Dawkins said.
A lengthy discussion ensued, with Vice Chairman Toby Hill saying adjustments would have to be broadly shared among the board, the community and the state.
“My concern is that if we put in a 1.5 mill increase, this would have a direct impact on citizens,” said board member Fred Wilson. “This, plus the economic situation, may affect them making their house payment. I want to lessen the impact.”
Taking another approach were board members Pamela Greenway and Griff Clements.
Clements said it would bother him for the fund balance to dip below $10 million, and “we’re talking about taking more than $4 million out of it already. I’m against reducing the fund balance any amount.”
“Every homeowner in Houston County knows their home’s value rises because of the school system,” Greenway said.
“People want us to keep the system at this level, at its maximum potential. I suggest we raise the millage, even up to 2 points, and keep at least $10 million in reserves.”
Thublin noted earlier that the actual millage rate of 12.47 mills is part of the effective millage rate of 18.5 mills, with 6.03 mills rolled back in the county’s local option sales tax. The state puts a cap of 20 mills for schools, so at the moment the board can raise the millage rate by only 1.5 mills. In Houston County, 1 mill on a $150,000 home is $60.
On a motion by Hill, the board unanimously approved that Carpenter help prepare a budget for discussion at the March 9 work session that incorporates a 1.5 mill increase, reduces expenses and keeps a fund balance of no less than $10 million.
“We didn’t create this, but we all have to share in the resolution of this,” said board member Marianne Melnick.
To contact writer Jake Jacobs, call 923-6199, extension 305.