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The Shelby County Board of Education received some grim news with the first look at its 2012-13 budget.
The draft budget, which is a state-mandated review of projected receipts and expenses, was presented at Thursday's meeting and with it came an appeal from Superintendent James Neihof that the board members talk to the county’s leaders in Frankfort about continuing cut costs in education.
In his report, Neihof said the state needs to get back to the funding level it provided in 2008.
"Since 2008, Kentucky's investment in public schools has been on the decline," he said, quoting the financial burden put on district by the legislature’s mandating that local districts begin covering increased amounts of retirement and its slashing of grants.
"SEEK funding to our district has declined by nearly two million dollars from the 2008-09 school year to last year," he said. "This happened at the same time the school district's average daily attendance increased by a little over 300 students."
He went on to note grant funds that have been drastically reduced, including Extended School Services by 61 percent, Professional Development by 79 percent, Safe School funds by 60 percent and textbook funds by 100 percent. These cuts have cost the district $550,000 more this year as compared to 2008.
The textbook cuts have hit deep, even causing the board to increase taxes in 2010 to cover a $300,000 expense for new books.
As the district continues to grow, Neihof said that cuts would have to be made.
This year, to help present a balanced budget, Neihof noted that the biggest cuts will come in administration.
"A significant portion of this reductions will come from contract term reductions for administrators and a reduction in district support personnel," he said. "Administrators who now work 240-day contracts annually will work 236 days next year. In order to make this work, we will close all schools and the central office during a district-wide shut down week the last week of December."
This also would generate savings from the less electricity used that week.
This comes on the heels of the district’s cutting four support positions last year.
The board members were emphatic about meeting with and discussing the state issues with the local representation.
"I think I'd like to sit down with the people Shelby County has sent to Frankfort and share this information with them," board member Sam Hinkle said.
Neihof agreed to reach out to state Rep. Brad Montell (R-Shelbyville) and state Sen. Paul Hornback (R-Shelbyville) for a meeting.
However, that won't likely help this year's budget, which features a $200,000 reduction in overall expenses.
The general-fund receipts have district officials predicting $58.8 million in total funds, with $43.6 million in the general fund. That's a .5 percent increase over last year and a 1.5 percent increase, $655,000, in the general fund.
Total projected expenses are $56.7 million, down .4 percent from last year and 10.8 percent over the actual budget from 2010-11. The general fund expenses are expected to be about $43.5 million, up about 1 percent from the previous year.
However, District Director of Finance Greg Murphy made sure to note that things are far from finished.
"We really have more questions than answers right now," he said.
The district has to make several predictions, many of which will be refined as the year and research continue, and the budget cannot be completed without information from the state on how they will fund programs and SEEK and until the board adopts its tax rate in late August or early September.
As of now, the budget predicts 120 new students next year, which would be a huge increase. This year the district grew by 67 students.
Murphy said he also estimated the state funding based on current levels, which have to be set by the legislature this year.
Without knowing what the tax rate will be when bills are levied in the fall, using the current tax rate Murphy projects the local tax revenue to be 19.6 million, an increase of 1.4 percent over the 2011-12 budget.
In March the district will refine the school allocations, with better estimates on the number of new teachers, set at three now, and new students.
In May the board will vote on the tentative budget, which is followed by the tax-rate adoption in August. Once that is set and school has started, the district knows its average daily attendance and tax rate and can form the working budget with actual numbers for SEEK and local revenue funding.