BY KRISTI REED
Despite the potential loss of millions in revenue, the Barrow County Board of Education has opted not to seek additional taxpayer funding at this time.
The board voted unanimously to leave the millage rate at 18.5 mils or $1,850 on every $100,000 of assessed value.
With projections of a $4.1 million budget shortfall even before the potential cuts in state funding, the board could now see that deficit grow to $7.7 million.
The good news – Barrow County Schools now expects to end fiscal year 2008 with $8.7 million in reserves, an increase of $1.6 million from original estimates. While the reserves may give the board a financial cushion, the long term outlook is bleak.
In June, the board approved a $102.1 million budget. The projected revenues were listed at $98 million.
Part of that revenue was based on state funding in excess of $60 million. Last week, school districts statewide learned that state budget shortfalls would result in funding reductions of two percent from the department of education.
Depending on how the reduction is calculated, it will mean a loss of $1.2 million to $1.4 million to Barrow County Schools.
The school system is also facing the loss of $2.2 million from the homestead tax relief grant. Typically, the grant offsets the reduction in tax revenue created by homestead exemptions. That funding, usually available in October, may be delayed or even eliminated for this school year. The General Assembly will decide in January whether or not to release the funds. If the funds are disbursed, the school system may not receive the money until March or April, six months later than normal.
Barrow County Schools assistant superintendent for business services Ken Cato warned board members that regardless of whether or not the grant is funded, it will mean cash flow problems for the district in the spring.
The school system will also have slightly less money from local taxes next year. The 2009 budget was based on a projected five percent increase in the tax digest. Recently released figures indicate the actual growth in the digest was just over 4.6 percent, or a loss of approximately $17,500 in projected revenue.
For the time being, board members remain optimistic that revenue will be sufficient to cover operations without reducing spending. If revenues do in fact fall short, the school system could end fiscal year 2009 with as little as $1 million in reserves.
While the system’s reserves may be enough to cover this year’s deficit, Cato is already looking ahead to 2010. Cato said state officials have warned that next year may bring larger cuts to the state education budget – perhaps as high as three percent.
“We need to be proactive now and create a sense in the district that it’s only going to get worse,” he said.