Budget letter to the School Board
Dear Mr. Blackmon, Members of the Board of School Trustees, and Citizens of Kershaw County:
With this document I present the Preliminary General Fund Budget for the Kershaw County School District for Fiscal Year 2016-2017. As presented, the Preliminary Budget totals $77,900,826, or a 3.4% increase as compared to the Fiscal Year 2015-16 Budget of $75,324,750.
Unfortunately, this is by necessity a “barebones maintenance of effort budget,” primarily due to less-than-anticipated state revenue. While I hope this situation might improve as the General Assembly budget process unfolds, it is best right now to develop a budget based on revenue as can be realistically projected at this time. The revenue assumptions are obviously conservative. Appropriate adjustments can be considered as new revenue information is received, especially related to the budget deliberations at the General Assembly and discussions the Board will have with County Council.
In developing a Preliminary Budget, we have actively involved the people most impacted by the choices that are ultimately made. Beginning in January, senior staff met with every individual building principal to discuss needs and priorities. Similar discussions were held with district office administrators. These meetings were especially beneficial to me in terms of assessing where we stand. Beyond these meetings, I received input from Teacher Cabinet, Support Cabinet, Parent Cabinet, and Student Cabinet. I feel very good about the fact that the Preliminary Budget reflects a great deal of discussion and reflection.
Factors Impacting the Preliminary Budget
The Preliminary Budget is predicated on an enrollment of 10,424 K-12 students, an increase of 51 students over the 2015-16 school year. I would note that enrollment in the current year has exceeded projection. However, I believe it prudent to project enrollment conservatively at this point in time and adjust as additional data becomes available.
The South Carolina House of Representatives recently passed a budget that placed somewhat more emphasis on education than in the past several years. While this emphasis is certainly welcome, and overdue, the reality is that Base Student Cost will still fall almost $400 below the legal requirement. For Kershaw County, this amounts to almost $4 million in revenue lost for next year and almost $75 million in revenue lost since 2005
In addition to the Base Student Cost being underfunded, there are other state-level issues that are negatively impacting our budget situation. What is particularly concerning is that because of a revised calculation as to how student poverty is measured, our state funding for next year is $250,000-$300,000 less than it would have been under the previous calculation. This reduction comes on the heels of a loss of approximately $225,000 in state funding during the current year due the state underestimating the actual amount of money needed to fund Base Student Cost. Frankly, this entire situation is difficult to understand in a year when the state has over $1.3 billion in new revenue.
Our district continues to struggle with resources that were lost during the economic downturn and have not yet been restored. We also continue to lose ground in terms of competitive compensation with neighboring districts. This is particularly troubling because it is projected that over 40% of the teaching force in South Carolina will retire over the next ten years. The competition to replace these teachers will be stiff. We will certainly need to be better positioned than we are now.
The Preliminary Budget assumes no increase in local millage. As I mentioned at the Board’s March 15 meeting, the Board will need to consider whether or not it is advisable to pursue an operating millage increase during a year that a referendum question will be on the ballot.
There are numerous priorities in our district that need to be met, especially because of the deep cuts made during the economic downturn. Unfortunately, available revenue does not come close to supporting all of the critical priorities. Based on discussions with the Board, staff, parents, and community members, the following areas have emerged as the highest priority areas:
- Competitive compensation, especially in light of two years of frozen salaries and furloughs for all employees that were implemented during the downturn
- Funding to maintain current class size assuming enrollment growth
- Restoration to the greatest degree possible of line items and personnel eliminated during the downturn
- Funding for libraries
- Funding for ongoing maintenance needs
The Preliminary Budget includes the following major initiatives and restorations:
- Teaching positions in light of anticipated enrollment growth
- Step increase plus additional 2% for teachers, as mandated by the House budget
- Step increase only for all other employees due to lower-than-anticipated state revenue
- Necessary increases in fixed-cost line items (insurance, etc.)
I am recommending that $400,000 of Fund Balance be used to address maintenance needs and $100,000 of Fund Balance be used to address libraries.
Following are areas that because of funding limitations could not be included in the Preliminary Budget and would be the areas I would most want to address if additional funds became available.
- 2% salary increase beyond the step for all non-teacher employees
- Increase in National Board stipends beyond the current $2,000
- Salary increase for working retirees beyond the current Step 10
It is of particular concern to me that funding is not sufficient to provide the same salary increase for all employees. All of our employees contribute to the success of our district and I believe strongly that there should be equity for all employees in terms of salary considerations.
I can say with absolutely no hesitation that this budget does not meet all of the District’s critical needs and does not provide the breadth of programs and services that should be available to our students. At the end of the process, however, the Board must approve a spending plan that is balanced to projected revenues. That said, our District continues to do an exemplary job of utilizing its resources effectively and efficiently. Our academic results continue to compare more than favorably with district spending significantly more per student.
The following meetings have been scheduled for staff and the community to discuss and react to the Preliminary Budget:
- Monday, April 11 at Camden High School (Staff at 3:30 p.m./Public at 6:30 p.m.)
- Thursday, April 14 at Lugoff-Elgin High School (Staff at 3:30 p.m./Public at 6:30 p.m.)
- Monday, April 25 at North Central High School (Staff at 3:30 p.m./Public at 6:30 p.m.)
Feedback from these meetings will be presented to the Board to consider as it finalizes its budget.
The Board is scheduled to meet with County Council about the budget on Tuesday, May 10.
I’ve always believed that a budget is both a structured plan for efficient use of resources and a tangible statement of priorities. I look forward to working with the Board and the community to adopt a budget that provides the best possible education for our students within the resources available.
Dr. Frank E. Morgan, Superintendent
Filed under: Superintendent |