The Cumberland County Board of Education got its first look at the preliminary general fund schools budget for 2014-'15 Thursday, finding a projected shortfall of $1.5 million.
Among items impacting the budget are $300,000 currently budgeted for strategic compensation for teachers, an estimated three percent increase in insurance premiums at $318,613, and step raises and longevity pay for all employees at $579,753.
"We feel very strongly we need to go to our county commissioners and ask for an increase in tax," said Director of Schools Donald Andrews. "We believe that we can show the true need for this increase. Whether we get it or not, we don't know, but we're going to ask for permission from our board to give us the opportunity to go in and do our best selling job to convince our county commission of our funding needs."
The budget includes Basic Education Program funding of $45.347 million in state and local funds. This includes an estimated $16.7 million in local funding required. However, a memo from Maryanne Durski, executive director of the office of local finance for the state, cautions that the fiscal capacity indices have not yet been updated. These fiscal indices calculate the local ability to pay and have required greater local funding in Cumberland County in recent years. That should be updated in May.
"Is it safe to say we won't be happy here when that is updated?" asked Dan Schlafer, 9th District representative.
Chief Financial Officer Bob Scarbrough said it was likely the local required funding would increase with an update of the fiscal capacity indices.
The budget includes step raises for teachers as they gain new degrees and have another year of experience to move along the Cumberland County teacher pay scale. A raise in teacher salaries will not be coming from the state, however, with Gov. Bill Haslam dropping an earlier budget proposal for a two percent hike in teacher salaries. However, the state has seen revenues come in under projections and Haslam cut the proposed raise from his budget in an attempt to close a $160 million gap in the state budget. Not implementing the raises for teachers and a one percent raise for other state workers saves $76 million.
"While the governor pulled out two percent, we discovered there was the possibility there would be a 40 percent decrease in the salary equity funding," Andrews told the BOE.
The state had previously proposed $597,000 in salary equity funding for Cumberland County teachers, what would likely be a one-time bonus Andrews said, due to it being unlikely funding would be included in subsequent years to continue the salary increase.
The new total would be about $353,000. Cumberland County, though, would have to increase its local funding to qualify for state equity funds. The local match would be $161,521 to qualify for the state salary equity funds.
"We have one of the best systems in the state of Tennessee, and it's been that way for years," Andrews said in terms of the insurance benefits package offered teachers in Cumberland County. "While we have this, we have got to continue to look beyond just this to salary increase."
Staffing is the biggest cost in the budget, with $15.59 million budgeted for 356 teaching positions in the regular instruction program. That cost does include $300,000 in strategic compensation. The BEP bases much of its funding for teachers based on Average Daily Membership, the average number of students in class, but that looks at the school system as a whole and not the number of students in each grade at each school. The school system must maintain class sizes in all schools at or below maximum class sizes, such as 25 students in a class at kindergarten. The school system cannot have split-grade classrooms.
"We don't need to lose sight that there are faces behind those numbers," Schlafer cautioned.
Josh Stone, 4th District representative, said he had been contacted by parents and others concerned about class sizes going up.
"People are freaking out about larger class sizes," Stone said. "That's a real concern for people."
Scarbrough said each school's staffing was evaluated based on the number of students at the school and in each grade level.
"There are going to be a few adjustments, but it's not going to be real drastic," he said.
Stone said concerns focused on what was best for the students.
"I have to agree. If you get 33 to 34 kids in a classroom, they're at a disadvantage to kids with 25 in a classroom," Stone said. "I know we're in a tight budget, but if we're asking for money, that might be a place we can ask for more."
Rebecca Wood, assistant director of curriculum, instruction and accountability, said, "If you all decide that you want to put more teachers in, of course we would be thrilled. We would love that. But, at the same time, we have to be just as concerned about the classes that are almost to 25, almost to 30 and 35. The only way for a starting point, you have to go with 'What is it that you earn.' It was not a scare tactic. It was just a starting point to put everybody on the same playing field."
Charles Tollett, 1st District representative, said he understood the data had been provided to principals so they could begin planning for any changes.
The budget includes $533,617 to purchase textbooks. This is an increase in of $433,617 over last year's budget because, last year, the school system only purchased books needed to replace books. This year, the school system needs to purchase a new series for social studies in all grades.
Richard Janeway, 2nd District representative, asked if a study had been done on the cost of textbooks versus converting to e-textbooks and tablets.
"We could, no. 1, quit killing trees and, no. 2, quit having these kids from having 50 pounds of books all the time," Janeway said. "Updates could be done electronically within five minutes of doing an update and they don't have to keep printing a whole page if they make a mistake. Where's the cost comparison?"
Janet Graham, interim supervisor of K-12 curriculum, said, "Once you adopt the textbook and you buy them, you do have access if we ever move to a one-on-one program. That's where you have the expense, in providing the device."
The school system is proposing $381,042 for technology to get the system on track with replacing out-dated computers in schools.
"This is a commitment to our life cycle replacement for computers we already have inventoried," Jason Rockwell, technology director, said.
This amount is for an Apple leasing program. The school system could save $90,841 if it did not go with the leasing option and instead did a life cycle replacement at two schools.
The total expenditures is $51.5 million, a difference of $3.9 million of projected revenues. The school system is projecting a fund balance of $3.9 million. The school system has proposed using $2.4 million of fund balance funds, which can only be used for one-time expenses, towards balancing the budget. That leaves a shortfall of $1.5 million.
The budget assumes the minimum required local funding, which comes from local tax sources, including county property tax, sales tax and the liquor by the drink tax being paid to the school system by the city of Crossville.
The revenue collections are also held flat in the proposed budget, which board members questioned.
"We know it revenue won't stay flat," Janeway said. "That's not realistic."
There are possible savings, including purchasing fewer buses if the state legislature changes the law on age of buses. In that case, the school system would need only two new buses, and not six new buses and one special education bus, saving $435,000.
Other proposed savings could be reducing the strategic compensation funding by half, to $150,000; reducing capital allocations for schools to $5,000 per school and $30,000 for emergencies, saving $60,000; and purchasing new textbooks for grades 4 through 12, saving $90,000. Another proposed savings would be to reduce middle school career and technical education teachers, for $175,000 in savings.
The board will hold another work session on the budget April 24 at 5 p.m., prior to the monthly BOE meeting.