School budget fine, for now

Local News

January 28, 2011

State cuts to have long-term effects

By Tim Mandell Register News Writer The Richmond Register Fri Jan 28, 2011, 10:00 AM EST

RICHMOND — Madison County Schools has been saving for a rainy day.

Based on the Kentucky Department of Education’s recent announcement that they will cut nearly $50 million in funding to local schools, that rainy day may be on the horizon sooner than expected.

The major concern is the Support Education Excellence in Kentucky (SEEK) funding.

SEEK, the primary source of money provided to public schools, allots a certain amount of money to each district based on student attendance.

In a press release dated Jan. 5, the Kentucky Department of Education said SEEK funding for the Fiscal Year 2011 is about $2.5 billion, which is approximately $49.3 million less than what actually is needed.

Unanticipated student growth is the main reason given for the financial shortfall.

Madison County Schools has been anticipating such a shortfall and has been saving accordingly, said Tommy Floyd, superintendent.

Although the district expects to be fine for the remainder of this school year and the 2011-12 school year, there are budget concerns for 2012-13, Floyd said.

“Unless the state steps in and picks up where they are currently shorting public education, we will be facing serious effects and decisions in 2012-13,” Floyd said.

“I am confident we can weather the storm now and next year,” he said. “If we hadn’t saved up capital outlay, we’d be in a much more difficult situation. We knew this was coming.”

The current year capital outlay is $980,000. Cuts to SEEK would cost the district $740,000.

Madison County Schools will be able to take money from this year’s capital outlay to cover the $740,000 without having to dip into the $2,858,000 capital outlay the district has saved over the previous three years, Floyd said.

The projected year-end balance is $5.6 million, he said. That money does not account for the $735,000 from the American Recovery and Reinvestment Act (ARRA) to pay recurring special education salaries. Next year, ARRA funds will not be available.

A draft budget given to the school board reflects revenues based on the assumption that SEEK will pay $3,903 per student, the average daily attendance at Madison County Schools is 9,900 students, as well as a 4 percent increase in property taxes and an increase in motor vehicle taxes.

Budgeted expenditures reflect a .5 percent increase in salaries based on steps and rank changes (such as an employee completing a higher degree), additional staff needed for Farristown Middle School when it opens in the fall, an increase in special education costs because of the loss of ARRA, approximately $200,000 in increased salary costs because of the end of grants for math and reading teachers, the need to replace less experienced teachers and the rising cost of diesel fuel.

Anticipated costs not budgeted include the need for additional bus drivers, start-up supplies and textbooks for the new school, updated textbooks for high schools and the cost of potential federal funding cuts.

Rising transportation and retirement costs and state-mandated raises also affect the district’s financial outlook.

Transportation has not been fully funded by the state since the 2003-04 school year.

In 2004-05, the district faced a $153,659 shortage in transportation. That number has grown significantly each year. For the current year, the budget shortage is $1,617.305.

Previously, the state paid for retirement, but has since required districts to begin kicking in to help costs, Floyd said.

In 2003-04, the retirement cost to Madison County Schools was $470,469 or 7.34 percent.

During the 2009-10 school year, the retirement cost was $1,415,604 or 17.37 percent.

Unemployment historically cost $30,000 and is now $170,000 with employees drawing for longer periods and fewer jobs available, Floyd said.

The Kentucky Teachers Retirement System (KTRS) used to be 100 percent state expenses, but districts paid .25 percent in 2010-2011 and will pay .50 percent in 2011-12, he said.

Kentucky has a state-mandated 1 percent raise, but does not provide state money to cover the costs, Floyd said.

Those raises cost the district $400,000 to $450,000, he said.

Additional concerns are increases in KTRS that are projected to exceed $1 million annually during the 2015-16 school year, declining special education funding, loss of Edu Jobs and the rising cost of unemployment, which is expected to double over the next few years, Floyd said.

To combat rising costs, the district has taken several steps.

During the past three to four years, they have decreased the number of staff to improve efficiency, Floyd said.

He also said the district has learned to be more efficient in transportation by having fewer pick-up points, adding mid-route exchanges (where students get off one bus and onto another one so that both buses do not need to travel the same route) and by having drivers turn off the engine any time they are idling longer than a certain amount of time.

The district also has capitalized on available federal funds, Floyd said, adding that federal funds have played a significant role in helping reduce costs.

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