NEWARK – School board officials this week introduced a draft fiscal year 2012 budget totaling just over $90 million, but with the level of state funding a major question mark and hundreds of thousands of dollars in additional cuts still to be made, the finished product could look much different.
The proposed budget includes $89.8 million in anticipated revenues for fiscal year 2012, while the estimated expenditures for the upcoming fiscal year total about $90.2 million, leaving a deficit of $389,702 that must be reconciled in order to present a balanced budget to the County Commissioners in mid-February.
The revenue estimates include a $600,000 increase in the local contribution in Maintenance of Effort (MOE), due in large part to increased enrollment in the county’s public schools. Current state law requires local jurisdictions to match their contribution per pupil from the previous year, and although there is a waiver process if a hardship can be proven, it isn’t likely the county would get any relief from the state requirement based on the previous track record.
On the expenditure side, the proposed school board budget includes a $665,328 increase in fixed business costs, such as utilities and insurance, from this year to the next. In addition, the school board is expecting a reduction of $954,000 in federal contributions, including grants that are expected to expire in the coming fiscal year.
In most years, the initial difference between projected revenues and anticipated expenditures in the proposed school board budget totals several million dollars, making the $389,702 figure going into this year’s process seem manageable. The problem is school board officials report they have slashed most of the non-fixed costs to the bone, including drastic cuts in the funding for materials of instruction and technology, for example.
Before the budget was presented on Tuesday, school board officials had already cut $629,000 out of the proposed spending document, including a 10-percent across the board cut in all non-fixed costs and a 20-percent cut in materials of instruction.
While the non-fixed costs, such as materials of instruction, have been slashed already, the school board’s measure of last resort could be seeking savings in costs associated with personnel including salaries and benefits, for example. However, salaries have remained stagnant and the school system has tried to hold the line on new hires while maintaining low teacher-to-pupil ratios. An overwhelming amount of the school board budget is dedicated to costs associated with its personnel, but there is little wiggle room for savings in those areas, according to Board of Education Chief Financial Officer Vince Tolbert.
“Approximately 90 percent of our budget is people,” said Tolbert. “We’ve sliced that apple down just about as far as we can go.”
The biggest question mark going into the school budget process is the level of funding anticipated from the state, but with Maryland facing an estimated $1.6 billion deficit of its own, funding for schools won’t likely be flowing from Annapolis.
“This is based on the assumption of level funding from the state,” said Tolbert. “The governor’s budget gets introduced on Friday and we’ve heard there are more cuts on the way, but there is just no way to be sure.”
Board President Bob Hulburd said on Tuesday regardless of what happens with the state funding, the current budget process will be difficult.
“We don’t have all the figures, so we’re not really sure where we are,” said Hulburd. “It isn’t necessarily a pretty picture no matter how you look at it. These are challenging times and we are continually asked to do more with less, but we’ll do the best we can.”
Board members groused about the state’s long-standing formula, which links the amount of funding for a jurisdiction to the value of its real estate. According to the formula, Worcester is among the wealthiest counties in the state despite the fact that nearly 40 percent of its public school students come from households of poverty, which is higher than the state average and also higher than 13 other school systems.
“There has to be a frustration with the wealth-based formula,” said Board member Jonathan Cook. “That’s a real burden and I don’t see how we ever get out from under that. It’s unfair. With the state formula, we’ll never be able to address our funding needs.”
While state funding levels remain uncertain, the board continues on its normal path for the budget approval process, including a formal presentation to the County Commissioners in mid-February. Board member Donnie Shockley said the timetable for approval should be adjusted in order to take into account the level of state funding.
“I’m really not happy with the timetable for this,” said Shockley. “The county is asking us to sign off on a budget long before we know what the final numbers might be. There’s no way of knowing what the figures will be and yet we’re asked to submit an approved budget.”
However, Superintendent Dr. Jon Andes pointed out the final state numbers might not be available until the General Assembly session concludes in April.
“We might not know the level of state aid until the General Assembly adopts the state budget, and that might not be until the end of April,” said Andes. “We may have to come back and revise this to make further cuts.”