School spending falls, but so does revenue

Many systems had already been drawing down reserves to balance their local budgets, but the dramatic decline in income last year portends even worse days ahead for many public school systems.

Across the state, per pupil average spending hit a high in 2008 at $8,965 per student. Last year, that average had fallen to $8,558 per student, a drop of 4.5 percent between 2008 and 2012.

But it was in revenues statewide last year that the real decline happened. Revenues on a per student basis hit a high of $9,120 in FY2008. Last year, revenues per student across the state had fallen to $8,486, a drop of seven percent.

So while many systems across the state have been cutting spending, it hasn’t been enough to offset the dramatic drop in income and the increase in students in many systems. Revenues fell last year at a faster rate than the cost cutting, a trend that can’t be sustained as systems use up the last of their reserve funds.

The drop in revenues has been due to both state cuts in funding to local school systems and to the collapse of the local tax digest in many communities, neither of which local school boards can control, unless they raise their local property tax rates. But with some systems’ rates close to the 20-mill cap, even that may not be enough to stem the flow of red ink unless there are even more cuts in spending.

In the Barrow County School System last year, officials were able to keep per pupil revenues above expenses, owing to some major cuts in spending and a shorter school year. In fact, Barrow spent nearly $360 less per student last year than it did in FY2011 and it spent 6.4 percent less than it did in 2008.

But cuts going forward for Barrow County may be more difficult. Among school systems in Northeast Georgia, Barrow is already nearly the lowest in spending on a per student basis. At $7,457 per student spending in FY2012, Barrow was second only to the City of Jefferson School System in spending.

Both Jackson County and Madison County spend about 25 percent more per student than Barrow. Clarke County spends a whopping 56 percent more per student. On a statewide basis, Barrow was spending $1,100 less per student than the overall average.

The good news for Barrow County is that it appears to have kept revenues above expenses last year when many other school systems spent more than they took in.

But the bad news is that statewide, a lot of school systems are headed for a crash as their expenses outstrip their revenues. Those that have some reserves might hang on for FY2013, but those reserves are running dry in many systems.

For Barrow County, the system’s financial future remains uncertain. It has already made some significant cuts and is among the lowest in per student spending in the area. Its wiggle room for additional spending cuts or tax hikes is small. If the system continues to get new students with no additional revenues locally or from the state, it, too, could be headed for a serious financial crunch in the next 12 months.

Mike Buffington is co-publisher of the Barrow Journal. He can be reached at mike@mainstreetnews.com.