Wealth ranking change to cost system $4 M in state funds

Last updated: April 15. 2014 11:26AM - 3911 Views
By - mstrother@lagrangenews.com



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The Troup County School System is estimating a $3 million deficit for the next fiscal year and looking at eliminating about 30 positions, but hoping most will be through attrition.


School system Superintendent Cole Pugh said he intends to ask the Board of Education on Thursday to authorize the reduction in force, allowing staff the option to move forward with eliminating 29.5 positions.


“We think almost all of that can be dealt with through attrition and reassignment, and we think almost no one will be without a job if they want one, and then we’ll have to talk about other options to deal with the rest of the deficit,” Pugh said.


He added that the cuts in personnel are part of reducing about $1.7 million from next year’s budget. Despite a $2.8 million reduction in the state’s austerity cut to the school system, and $1.7 million in funds restored that was underfunded by the previous year’s state funds, a drastic drop in state equalization funding for next year has the school system looking at the $3 million deficit.


Pugh said he planned to meet with the school system Advisory Task Force – a group of school, local business and public representatives – to come up with further budget options.


The expected $2.8 million reduction to the school system’s austerity cut by the state legislature for the next school year still leaves the school system with $5.4 million in state austerity cuts.


The bigger problem arises from the county’s shift in wealth ranking, which will cost it about $4 million. Troup’s wealth ranking with the state was 99th, but has been upgraded to 66th for 2015, which will mean state equalization funding for the school system will drop from $4.7 million to $621,000.


“They take tax digests and rank you according to your wealth, and the poorer you are the more equalization funding you get, and the wealthier you appear, the less you get. … This cannot be predicted in advance, because we don’t have 180 tax digests and we can’t rank all that stuff,” Pugh said. “Until the state tells us where we fall, we can’t rank all this.”


Pugh said Troup may have lost the most equalization funding of any school system in the state.


Although recent state initiatives have funneled more funding to schools, Pugh said that the school system still faces a deficit because of continued underfunding.


The governor in January asked the general assembly to increase spending on public schools by $547 million, of which the state legislature devoted $314 million to reduce austerity cuts statewide, and $233 million to fund student enrollment growth, teacher salary increases and rising teacher and employee retirement costs. The governor also proposed holding off on implementing health insurance increases for non-certified employees, which would save the school system $775,000.


Pugh pointed out that the state has underfunded the county on Quality Basic Education funds by $67.2 million since 2002. For the current year, the state gave the school system $8.26 million less than the state’s funding formula for QBE, or 85.86 percent of the full amount.


“Now I’ve been to every campus, and one of the things that I said to employees was … ‘last August when you came to work you had a figure in mind that you thought you were going to be paid. Now what if we came back and announced that we were only going to give you 85.86 percent of what we told you you were gonna make when school started?’” Pugh said, giving an example of how the QBE program has been underfunded. “They didn’t think that would really be fair, but that’s, in a sense, what the state’s done to us since 2002.”


The state also is undercutting the school system on transportation costs by $4.76 million this year, Pugh said, funding about 23 percent of the school system’s actual transportation costs.


The total reduction in state funds to the school system for the current school year totaled $8,256,370, Pugh said. That equates to a reduction of $675 per student or $16,865 per classroom. So even though state funding has increased compared to previous years, the school system is still underfunded by the state.


“We have an annual budget deficit because there are state shortfalls in funding school finance formulas, and we will continue to have one every year as long as those formulas are underfunded,” Pugh said. “I don’t see the light at the end of the tunnel.”


Pugh said a letter from Senate Appropriations Chairman Jack Hill, House Appropriations Chairman Terry England and the Georgia Budget and Policy Institute to local school systems suggested using the reduction in austerity cuts for next year to return school systems to a 180-day calendar, eliminate furlough days and/or increase teacher salaries. Pugh pointed out the Troup County School System has been on a 180-day calendar, and has used fewer furlough days than most systems, but will be unable to eliminate them because of the $4 million drop in equalization funding.


Teachers currently have two furlough, or leave without pay, days. Campus and district administrators and other 240-day contract employees currently have five furlough days. Pugh said furlough days save about $463,500 per day.


“While most districts will be able to reduce or eliminate furloughs, we will not be able to,” Pugh said.


Pugh said that the school system is planning to pay step increases to eligible teachers, a $1 million cost, and is mandated for an employer match of $550,000 to the Teacher Retirement System.


Pugh commended the Board of Education for making previous cuts that he said have continued to save money for the school system. He said the school system’s previous moves to close Cannon Street and Unity elementary schools and West Side Magnet School has saved the school system about $3.3 million annually. He said alternatives would have included about nine furlough days for teachers and the employees who currently have two.


Pugh also pointed out that the school’s expense on operating expenses from its general fund have actually decreased by about $200,000 since 2004. The school system also has reduced its employee positions by 272 over the last three years, mostly by attrition and reassignment, Pugh said, but some employees did lose jobs.


The school system plans to continue to use special-purpose, local-option sales tax – or SPLOST – funds to consolidate elementary schools into fewer, larger school buildings that would cost less to operate. SPLOST funds are restricted to certain projects and cannot be used to supplement the school system’s general fund.


“I hate that we’re looking at the RIF (reduction in force),” said Board of Education Chairman Sheila Rowe. But when “88.35 percent (of) our total budget is salary and benefits, we’re down to the bare bones.”


Pugh replied: “Unfortunately when you have to make significant cutting and you’re over 88 percent personnel, you really can’t make a big cut without doing that.”

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