Published: Wednesday, Oct. 07, 2009 / Updated: Wednesday, Oct. 07, 2009 03:01 PM
District considers furloughs
FORT MILL --
The Fort Mill School Board faces an estimated $1 million shortfall based on the state's projection of a mid-year funding cut.
So just how does a school district bridge its financial gap?
The board is looking at several options, including tapping into the district's fund balance or reducing spending. Those cuts would come on top of cuts made earlier in the year to cope with a state funding crunch. Among the cuts could be employee compensation.
Either choice is a bitter pill the district must swallow in weeks to come.
“We either pull it out of our fund balance or we make cuts,” Fort Mill Schools Superintendent Keith Callicutt said minutes after a school board meeting ended Monday night. “That's just the way it is.”
It's a reality wrought by a shortfall in “state revenue that was based on the [extra] penny sales tax,” said Callicutt, who during the meeting was to offer an update on possible state budget cuts. That update was put on the back burner until the school district's audit is completed within the next two weeks, Callicutt said.
Yet, he said, the district can't afford not to address its financial woes. And putting red pens to an already tight 2009-2010 fiscal year budget isn't the answer, he said.
“There's no fat,” he said of wiggle room within the budget. “We're already spending less per child than any district in this region. You can't keep asking people to do more with less without impacting the quality of your programs.”
That's not a sacrifice Fort Mill school leaders are willing to take.
Instead, school leaders must consider two options: Pull $1 million from the district's reserve funding, also known as a fund balance. That account has approximately $12 million, according to Leanne Lordo, assistant superintendent for finance and operations.
“If we don't take it out of the fund balance, then we're going to have to look at cutting programs or people,” he said.
That ushers a grim reality for district employees, he said.
“Furloughs will be a possibility,” Callicutt said of a move that would put employees on unpaid leave.
But, he said, pay cuts will not factor into the equation.
“We would not be looking beyond furloughs,” he said. “The best case scenario would be take it out of the fund balance.”
The district's budget shortfall isn't novel.
It's a left over from this past summer, when the school board wrestled with a potential $4.7 million shortfall. During the district's last budget planning and fine-tuning sessions, officials faced that projected $4.7 million deficit. That budget pitfall was a by-product of the country's struggling economy, district leaders said.
Then, Gov. Mark Sanford was forced to request $700 million in federal stimulus money for South Carolina. That move netted $2.7 million for the Fort Mill School District, essentially reducing its shortfall to about $2.5 million, Callicutt said. But state budget restraints are getting tighter, Callicutt warned as he briefly updated the board and the public on possible cuts imposed by the state to the district's budget.
“We know it will be reduced,” by approximately four percent, he said.
“We will probably be cut by $1 million,” he said. “We're continuing to be asked to do more with less. The challenges are going to be greater and greater.”
That means the district's hiring freeze will remain in place, school leaders contend. But, holding off on new hires and leaving vacant positions is not the route Fort Mill wants to take for very long, Callicutt said.
Act 388, which shifted the source of most school funding from residential property tax to state sales tax, needs to be repealed, Callicutt and other school leaders have been saying. While Fort Mill's short term fix means tapping into reserve money or injecting cuts, the long term panacea means state leaders must walk the path least taken, Callicutt said.
“We must get the state to do something about funding public education,” he said. “Do total tax reform.”
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