Questions remain with school district's budget shortfall

By Anna Mitchell  

JANUARY 27, 2010 11:48 a.m. (0)

Business is carrying on as usual at area schools with supplies cut back by a fifth and teaching positions frozen, but the Greenville County School District has scurried to figure out how to fill an $8.4 million budget hole announced by the state Department of Education this fall and an even bigger one announced last month.

Meanwhile, power rates are set to rise in February, and the district has not yet seen the heating bills from an unusually cold December.

The cuts come as state tax revenue this year has again fallen short of projections.

School board members voted unanimously Tuesday to cover immediate expenses by dipping into the district’s roughly $48 million reserve fund – a pot of money set aside to keep the district in the black as tax revenues ebb and flow but also set aside to maintain the district’s strong credit rating. The board’s policy is to never let that fund go below 8 percent of the system’s operating budget, or about $36.9 million.

With other financial obligations factored in, the $8.4 million school board members voted to spend from the district’s savings leaves about $1.4 million of ready cash to deal with future shortfalls.

“So doing this pretty much uses up what we have saved and have to pull from,” board member Tommie Reece said. “This is not a practice we can do over and over this year.”

“That is correct,” the district’s finance director, Jeff Knotts, said.

And none of this factors in the large December cut – an amount Knotts said will remain unclear until March.

The good news, district spokesman Oby Lyles said, is that the cutbacks in supplies, training and personnel at every school have been saving Greenville County Schools money since the start of the fiscal year back in July. That money is accumulating and should help shore up the December cuts, he said – how much, though, nobody knows.

Superintendent Penny Fisher said the school district must soldier on through the financial bad times because “closing the plant” is not an option.

“We can’t limit production,” she said. “We can’t limit education. And we can’t file bankruptcy.”

State cuts during the 2008-2009 school year totaled $29 million, Knotts said. The school board had voted to spend $10 million a year ago out of its reserve fund to help cover costs then but ended up needing less than $3 million. Schools countywide had started cutting back on personnel and supplies as early as August 2008 and have continued to the present.

“The FY2009 audit shows those sacrifices worked and saved the district $8.4 million last year that went into the fund balance,” Knotts said.

The school district did not raise taxes last year.

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