The Pickens County school board heard more grim news Tuesday night during its February 26th budget workshop.
Over the last year or so the district has been hit with increases in healthcare costs due to the Patient Protection and Affordable Care Act (Obamacare) and has seen incremental decreases in property value, meaning less revenue. As the district prepares for next year’s budget and possible amendments to this year’s, the county faces an even more trying financial environment. During her presentation last night, CFO Amy Burgess recited a litany of obstacles the board faces, presently and in the future.
Burgess said the district will a see $2.9 million cut in state funding for FY13 in the form of QBE austerity measures. According to some assessments, the QBE or Quality Basic Education program has never been fully funded and has incrementally declined over the last few years. The board’s other White Whale is healthcare. Dictated by Obamacare, Pickens County School District will see a $590,000 increase in the employer portion of healthcare cost this year. Here, the increase includes both classified and certified employees. Come FY14, the matching portion for the Teacher Retirement Services will also increase, from 11.41 percent to 12.28 percent, which amounts to approximately $200,000. Additionally, Burgess noted the uncertainty from Washington about the looming sequestration, the across-the-board cuts in federal funding set to take place in March, if Congress does not strike a deal to avert them. Although the cuts are only 2.4 percent of federal spending, Burgess said they could impact the food service program, Title I funding, and special education. In a conversation with FYN last night, Burgess further explained that she does not know the cost of the cuts and said the money first goes to the state and then the state distributes the funding to the counties. The state, she added, could hold back some of the funding, if it sees fit.
The Republican-controlled House has already submitted two bills as alternatives to the sequestration, but the Senate, controlled by the Democrats, has not moved on the bills. President Obama is expected to meet with congressional leaders on Friday.
But, the school board faces other challenges too, such as a reduction in student population and the new tag tax legislation. Burgess said the district’s recent reduction in its student population will not bring enough money to fund classes. According to Burgess, the new tag tax legislation will also reduce revenue. Further, the school system is faced with step raises, which Burgess said will cost the county $40,000 for positions eligible for the increase.
“We’re not going to get any additional money from the state,”
“and we’re not getting any additional money from the federal people.”
As such, Burgess recommended several ways to address the financial obstacles.
“When it comes down to it,”
“we’ve got two places to go. One is to increase your revenue. The other one is to reduce your expenditures or some combination in-between.”
The increase in revenue would come in the form of a property tax increase. A reduction in expenditures, though, could be conducted in several ways. Considering the decrease in student population, Burgess said the schools will need fewer teachers and staff. However, she further commented that all departments will bear the reductions. Other options include eliminating electives, and reducing operational support. Burgess said the district must learn to be more efficient, adding that hard decisions are ahead for the board.