COVINGTON -- If the Newton County Board of Education doesn't make severe budget cuts this year, the members should expect more cuts in the future.
The Newton County School System is proposing that the school board make nearly $9 million in cuts this year to make up for expected revenue losses from the local, state and federal levels -- up to a $6.5 million reduction from local tax revenues, $2 million to $3 million from state revenue and $1.9 million or more from the federal government, which no longer is providing stimulus funds to schools.
"It's important to cut as close to $9 million as possible," said Peggy Bullard, business manager for NCSS, in a special called meeting last week between NCSS officials and school board members.
NCSS recommended that the school board cut $8.8 million from next school year's operating budget. It includes cuts to teachers, paraprofessionals and other staff positions, as well as complete programs and alternative schedules.
For next school year, the budget is expected to have a beginning fund balance of more than $12 million, but revenue is expected to be nearly $125 million, with more than $129 million in expenditures. That would leave the ending fund balance -- which school systems keep as reserve funds -- at $8 million, which is only 14 days of operating expenses.
"It's not ideal," Bullard said, adding that school systems generally are asked by state officials to keep at least 7 to 10 percent of their budgets in reserve funds.
If all revenue and expenditure figures remain the same for the 2012-13 school year -- which NCSS Superintendent Gary Mathews warned is not likely -- then the ending fund balance would be under $4 million, which is only about seven days of operating expenses, Bullard reported.
NCSS officials projected that if the school board decided to cut only $7.3 million this year, then next year's ending fund balance would be less than $6.5 million, or 11 days of operating expenses; and the following year's balance would only be $731,533, or about one operating day expense.
If the school board cut $6.3 million, then next year's ending balance would be about $5.5 million, or about 10 days, and the following year would be a negative balance of about $1.2 million.
If the school board cut only $5.3 million this year, then next year's balance would end at just about $4.5 million, or almost eight operating days, and the following year would be negative by more than $3 million, officials reported.
"The board could make a conscious decision and roll the dice," Mathews said, adding that in turn they would be saying they plan to make multi-million-dollar cuts over the next school years. "In this economy, who knows what some might presume you might lose. ... You gotta hope the economy comes back, but I don't think it's going to come back by (the 2012-13 school year)."
He suggested that it is more fiscally responsible to make deep cuts now in order to avoid having to make more cuts later.
"If we don't make deep cuts now, then (the 2012-13 school year) could be a real disaster," Mathews said.
He said he could argue that the school board should cut more than $9 million.
"But I don't recommend that -- we could wreak absolute havoc," he said.
Linda Hayden, associate superintendent for curriculum and instruction, said the Southern Association of Colleges and Schools recommended during its last accreditation visit for the system to keep $10 million in reserves to be fiscally sound. However, she said the system won't risk losing its accreditation if it doesn't do so.
"If we don't at least do this, then we're in trouble," said Dennis Carpenter, deputy superintendent for operations at NCSS. "We need to cut at least $8.8 million, not a dime less."
The school board is expected to make many decisions regarding cuts at its March 8 work session, which is scheduled to begin at 7 p.m. in the board room at the Newton County BOE building at 2109 Newton Drive N.E. in Covington. The board also will meet for a regular session meeting at the same time and location on March 15.