If the controversy over how to best use its facilities wasn’t enough of a headache for Jackson County School System leaders, now they face a potential financial crisis. The Jackson County Board of Education adopted an amended budget last week for the current fiscal year that projects a large drop in revenues and an increase in expenses.
If the new numbers hold, it would mean that the system will have to draw down $3.9 million out of its $6.2 million in reserves by June 30. That means the system would start its next fiscal year on July 1 with very little in reserves. The BOE would then have to decide about further spending cuts or tax hikes to stave off a financial collapse in FY 2014.
It isn’t the first time the system has faced a financial crisis in recent years. In FY2009, the system ended up with nearly $1 million deficit. After slashing expenses, it rebuilt its reserves in 2010 and 2011. But the continuing decline in the county’s property tax digest is now affecting that. When the BOE adopted its budget last June, it cut spending by three percent, but also anticipated that the tax digest would remain about the same or even go up slightly due to re-assessments of commercial property.
Instead, officials now believe local property tax revenues will drop by $2.3 million, from $30 million originally projected down to $27.2 million. Officials had originally set the overall general fund revenue budget at $84.1 million for the year, but now believe it will be only $81.7. At the same time, expense projections have also gone up by $1.6 million to $85.6 million. About $900,000 of the increase is in instruction cost. Officials had projected last June that instruction costs would fall by that amount due to furlough days.
Early in the year, the system adopted a plan to not replace departing staff except for teaching positions. That has saved the system over $1 million so far this year, officials said.
Superintendent John Green said Monday night in relation to the facilities proposals (see other story) that the system “has to pay attention to our fiscal needs.” He said that so far the system has not had across the board cuts or raised classroom sizes as many other systems are doing. Some school systems have also shortened their school year to save money.