July 24, 2018
By: Dwayne Page
The Board of Education may be faced with a decision on whether to go through with a plan to give local pay raises or bonuses to teachers and support staff.
During Monday night’s monthly meeting, the County Commission approved the new school budget for 2018-19 but took no action on the Board of Education’s request for the county to allocate a larger share of local option sales tax money for schools to fund the raises.
Concerned that the school system might run over budget this year, the Board of Education voted earlier this month to make this request of the County Commission. School board members said at the time that if the County Commission did not grant the request, they might have to opt for giving bonuses instead of raises.
Under the proposed school budget, all certified personnel including teachers would be given a $600 local pay raise in addition to the $600 increase they are getting from the state for a total of $1,200. Support staff would also get a local $600 pay hike.
The school board initially wanted to give teachers and other certified personnel a $2,400 local pay raise along with the $600 state increase and $1,500 for support staff but the budget committee of the county commission rejected it on May 31 along with other extra spending proposals included in the original school budget for 2018-19.
Last month, the budget committee accepted the school board’s scaled down proposal but with the understanding that there would be no local tax increase to pay for it and that any overspending would have to be covered by cash reserves from the school system’s $6.1 million fund balance.
Director of Schools Patrick Cripps said the proposed pay raises would be an additional cost to the school system of from $300,000 to $400,000 per year. However the system will be saving about $200,000 this year by not filling four vacant teaching positions at the schools.
The county generates almost $2.5 million each year in local option sales tax funds for schools (referred to as sinking fund). Of that, the county transfers $1,540,000 each year for the operation of schools along with $800,000 to $900,00 for school debt service obligations. The so-called sinking fund replenishes each year from local option sales tax collections in the county and four cities. The fund was set up decades ago by the county and intended to help fund school construction and other school capital outlay projects.
During Monday night’s County Commission meeting, County Mayor Tim Stribling explained that nearly all the money allocated to the school system from the local purpose fund (local option sales taxes) is spent each year for schools.
“If you look at 2017 and these are audited figures, we budgeted $2,500,000 (sales tax money for schools). We actually collected $2,653,000. We give to schools $1,540,000 from that fund every year to operate on in the general fund and then we pay from $800,000 to $900,000 every year toward school debt. Last year it was $829,853. We also had to pay the Trustee’s commission of $26,360. That put our expenditures from that fund at $2,396,213. That left us with $257,173 more than we spent. As of June 30 this year, we ended the local purpose fund in the black by $358,784 which put that fund balance at $1,968,932,” said County Mayor Stribling.
One problem with allocating more funding is that the sales tax collections fluctuate each year.
“We ended 2017 in the black at $257,173 (local purpose fund for schools) but in 2015 we gained only $3,909 so everything we budget for schools from that fund is pretty much spent each year. And if we have a recession and the sales tax revenue doesn’t come in as much then we could have to go into the fund balance to offset that,” added Stribling.
“At this time don’t they (school system) have six million dollars of their own money that they have not spent that they have collected from us,” asked Sixth District Commissioner Betty Atnip?
“They (school system) finished 2017 with a fund balance of $6.1 million,” answered County Mayor Stribling.
“So they have their own money,” added Atnip.
While the school system ended the year 2014 in the red by $253,836, it was back in the black by $144,159 at the close of the 2015 budget year; by $153,335 in 2016; and by $1,052,912 in 2017 putting the fund balance or cash reserves for schools at $6.1 million. The school budget is projected to close out the 2018 year in the red by $886,937 but actual numbers are not yet known.