Published: August 07, 2008 04:39 pm         

School board budget and shortfall may require tax increase

Commissioners say it will take at least a 24-cent property tax increase in order to cover a $3 million shortfall to fund the school system's budget as presented. That conclusion was reached after a nearly six-hour marathon meeting between the Cumberland County Budget Committee and the Board of Education.

At the end of the meeting, commissioners decided to meet again Aug. 12 to further discuss the BOE's budget.

Commissioners serving on the budget committee and Director of Schools Aarona VanWinkle spent Tuesday night reviewing the BOE's 2008-'09 proposed budget. In a line by line manner, the committee reviewed the 24-page $48 million budget.

"I'm telling you this is what we need in order to keep everything going and continue to offer these educational programs to our children in the county. This is what the children of Cumberland County need for their education," Director of Schools Aarona VanWinkle said.

VanWinkle showed commissioners the main increases in the BOE's budget over last year's $43 million budget are in new certified staff positions, which includes 15 new teachers, a maintenance employee, a library media employee a BOE finance director and paying half of the school resource officer costs. Other increases include instructional materials, health insurance, fuel, one percent step raises, three percent support staff raises, Social Security, retirement and maintenance of the school system.

Certified personnel, teachers, are not receiving a salary increase from the state.

She began by showing commissioners that the comptroller had made a mistake on the BOE's fund balance for July 2007, making it appear as though the BOE had $600,000 more in its fund balance.

"It was the comptroller's mistake and they have sent me a letter and it has been corrected with a journal entry, so the audit report is incorrect," VanWinkle said.

The meeting went smoothly without much conflict until the Central Office budget was discussed.

In the directors line a finance director position is proposed for the BOE at a budgeted rate of $65,000. There is also an additional $20,000 added for a part of the health coordinator's salary, which is paid by a grant.

"With your salary and the business manager's salary and a finance director we're talking about $200,000 to manage the school system. I'll tell you — it's a hard sell. People are having a hard time putting gas in their cars. They're putting it on credit cards. People just don't have the money for this kind of thing," said 5th District Commissioner Sharon York.

"We need to look at priorities here. The tax revenue collections are down. The collections aren't there. These times are tough," 3rd District Commissioner Lynn Tollett said.

"Well, if you were over there and involved you would know just how understaffed it is," BOE Chair Shirley Parris said.

VanWinkle responded to the commissioners, "There was a lot of challenge last year over the budget ... by doing this we are looking for credibility with the county commission. To have a professional doing the budgeting so I can have more time to spend in the schools. I've heard a number of commissioners say they wanted a professional doing this. We're trying to be able to work together in a better manner."

"Throwing dollars into a position won't do that. Doing this, meeting like this and talking is how we do that. The people just don't have the money, folks. We have to be realistic," York said.

Ninth District Commissioner Carmin Lynch asked if creating the position had anything to do with the BOE coming out from under the financial management act.

"I don't think it does," VanWinkle said.

"Where does that stand? Is there a suit going to be filed?" Lynch asked.

"I don't know about that ... We'll cross that bridge later," VanWinkle said.

She continued to say the finance director position would help tremendously for relations with the county and BOE, but said she knew things were tight this year.

"I know this has been a tough year. But I don't think we will get as much next year from the state. It's based on our ability to pay," VanWinkle said.

She explained the majority of the revenues will come from the state, followed by local sales tax and property tax from the county. She said the Fox Formula is used to determine the county's ability to fund education based solely on property tax and sales tax revenues. VanWinkle further explained switching to the formula from the Tennessee Advisory Commission on Intergovermental Relations' (TACIR) formula cost the county nearly $5 million last year.

"Our equalized assessed property is at $1.1 billion…This is property that could be taxed so what the state is saying is, 'We're concerned with what you can tax.' That is what they are basing the county's ability to pay on," she said.

"Yeah, but the state's formula says you can run the school system on $40 million," Lynch said. "You're operating on a $43 million continuing budget.

"How can we offer any of these programs? That's only if we put in the basics. Our kids deserve better than the bottom and the minimum funding," she said.

"I'm sick of hearing this. The state ain't even including the debt service on the new high school in that formula. That building is part of the expense of debt and they don't count it," said 7th District Commissioner Mike Harvel.

"I'm telling you this is what we need. This is what the kids need in Cumberland County for their education. We have to have more funding. Where it comes from is up to you, but I don't know. I'm telling you what we need," VanWinkle said.

"Yeah, but can the people afford to absorb four or five million dollars? I mean keep in mind what we are hearing from the people. They can't do it. They don't have the money and tax collections are down. As soon as this comes out the phone calls are going to start," Tollett said.

"We can't run the schools with a $5 million defecit," VanWinkle said.

"I can see the problem from both sides. The county has not added a tax penny to the schools since the new high school was opened. I think the last time was in 2001. The last time we raised property taxes a few years ago the school system hadn't asked for any of it," said 1st District Commissioner Jim Inman.

"It would take a 45-cent tax increase to cover that and maintain what we have in the school system," 6th District Commissioner Wendell Wilson said.

"If we back out the projects that are included and rolled over in the fund balance it comes to $3 million. I don't expect you to pay for something twice," VanWinkle said.

After figuring again Wilson said, "That would be around a 24 to 25 cent property tax increase."

"I'm telling you there's no way we can keep what we have and offer these programs without it. We'd have to make a lot of cuts," VanWinkle said.

"We're going to have to look at this and see what we can come up with and digest this. We still have a lot of issues in the general fund. There's a shortfall there we're going to have to make up," Tollett said.

According to actual figures for the operation of the school system the total for last year was $43 million. This year's proposed budget is at $48 million.

Commissioners then decided to meet again to talk with the BOE on Aug. 12 at 4:30 p.m. in the small courtroom at the Cumberland County Courthouse. The public is welcome to attend.