COVINGTON -- The budget outlook for the Newton County School System just got worse.
After already cutting nearly $8.3 million from next school year's budget and wanting to find another $185,000 to cover prekindergarten costs cut from the state budget, NCSS might be faced with losing another $1.5 million.
NCSS Superintendent Gary Mathews reported Tuesday night during the monthly work session of the Newton County Board of Education that NCSS is likely to have to shell out another $1,517,33 to cover expected increased expenses.
He said $798,070 is expected to be added to expenses for the 2010-11 school year -- cutting away from its nearly $11.4 million projected ended fund balance for this school year -- to cover the Special Education Maintenance Effort. Last year, NCSS received federal funding through American Recovery and Reinvestment Act for special education services.
However, Mathews said for NCSS to keep receiving that funding that its students would have to meet certain academic benchmarks. But last year, students did not meet state and federal guidelines -- several Newton County schools failed to meet Adequate Yearly Progress, partly due to low special education test scores, he said.
He said last year that the Georgia Department of Education advised NCSS and other systems around the state to accept the federal funding and that issues concerning academic benchmarks would be resolved because the state would recognize the economic meltdown. However, so far the GaDOE only has reported that officials are trying to work out something for affected systems to not owe all or some of the money.
"We are learning this year that it's an issue," Mathews said. "This might very well be a real number, a negative number."
Also this week, NCSS was notified that the total increase in classified employee insurance would be $911,601 this year because of recent actions taken by the Georgia General Assembly to cover a deficit. Mathews said the food services department will cover its share by paying $192,338, but $719,263 will have to be paid from the general fund for the 2011-12 school year.
As a result, the projected ending fund balance for next school year will be reduced from $7.4 million to $5.9 million.
Assuming no new or lost revenues and expenses for the following two school years, the projected ending fund balance for the 2012-13 school year would b e $434,313, or less than a day of operating expenses -- systems are recommended to keep at least 7 percent of its budget in reserves.
For the 2013-14 school year, the balance would be negative $5 million, and school systems cannot operate at a negative balance, Mathews said.
He said these projections would mean that the school board would need to cut at least $9.5 million from the 2013-14 school year budget to maintain a minimalist ending fund balance of nearly $4.5 million -- to get an ending fund balance of $9.1 million, or the recommended 7 percent, board members would have to cut more than $14 million.
"The $8.2 million we just cut was daunting enough," Mathews said. "There's no way we could meet what various state officials tell us ... without absolutely wreaking havoc."
He told the board that they could look at making more cuts now or they could wait until next school year to see more updated figures to preserve what NCSS has for now.
"I think it would be the board's advantage to go back to the drawing board ... as painful as it is," said school board member Eddie Johnson. "We left some money on the table with (the most recent) cuts. We need to go back with a machete and come back with some cuts. The sooner we do it, the better."
The school board members agreed to start looking into more cuts soon but did not firmly state that they would make anymore cuts this year.
"We have a great challenge ahead of us," said school board Chair Almond Turner. "I think everybody needs to start thinking about it."
Mathews said the school board could look at cuts that were proposed earlier this year that they did not pass, such as reducing the school year and eliminating paraprofessional positions. He also said NCSS officials could come up with some other budget cut scenarios.
He plans to notify the board when he receives more accurate figures from state officials in about two weeks, and then he will schedule a special called work session with board members.
NCSS must issue teacher contracts no later than May 15, according to state regulations. The board is expected to approve a tentative budget for the 2011-12 school year in May and a final budget in June