School district waiting for news of funding cuts
By JIM FAILE
DARLINGTON - Darlington County School District officials are bracing for what they say could be a massive cut in state funding for operations to K-12 public education for the coming budget year.
Superintendent of Education Dr. Rainey Knight said she and district officials are waiting to see what the General Assembly does to deal with an $829 million revenue shortfall projected for the upcoming state budget.
“We do not know at this time,” Knight said.
“We’ve cut so close to the bone at these schools. I really feel like if we go much further there will be some things that we will lose,” she said.
Knight said she has heard some estimates that state cuts could reach as much as 20 percent. “Ten percent’s going to be bad enough,” she said.
“We want to be as judicious as we can, but I’m really scared,” Knight said.
The district will start off the new budget year on July 1 with $2.7 million less than it has in this year’s $61.6 million general operations budget. That is how much federal stimulus money is in the current year’s budget, money that will be gone next year.
The district received about $6 million in stimulus funds to spread over a two-year period and used $3.3 million of that last year, Knight said.
But the last of the stimulus money runs out this year, she said. And it will come out of the general operations budget.
And that’s on top of a total of nearly $18 million in funding lost to the district over the previous two years, according to Knight.
Knight said district officials will look to natural attrition as a means of making up for a portion of whatever the state winds up cutting as employees retire or resign as the school year winds down.
Right now, Knight said, about 20 employees have indicated they will leave at the end of the current school year. Others will join those ranks as the date for employee contracts to go out gets closer, she said.
“We have a lot of people who are retiring or resigning this year. I’m hoping to be able to take that natural attrition and look at those positions and say, do we need this position,” Knight said.
“I’m trying not to implement a RIF (reduction in force),” she said. A RIF would mean layoffs of district employees.
“If we have enough attrition, then nobody loses a job,” she said.
But one result of that is likely to be larger class sizes, Knight said.
And even that attrition, she said, will not make up for the kind of cut she expects from the state.
Knight said the district will have no choice but to dig deep into its general fund balance of nearly $19 million to balance its new budget. “We will have to look at the fund balance,” she said.
“The bottom line is we are going to need to use the fund balance to balance the budget,” she said. Knight said the district may find itself using as much as $10 million to $12 million out of its fund balance.
The fund balance is built up from funds left over at the end of each budget year – which Knight said are relatively few in comparison to the overall budget - and it has taken several years for the district to build it to its current level.
While part of the fund balance is set aside for “rainy day” periods, a significant portion of that money is intended to carry the district through those times when cash flow from local tax revenues is slow, typically from July through January, but bills still have to be paid and payroll met, she said. The district’s auditors recommend maintaining about three months’ worth of operating capital in the fund balance for that purpose, she said.
“We have a very healthy fund balance on purpose. And we are prepared to use that fund balance,” Knight said.
But even using fund balance dollars represents only a temporary fix and will only soften the initial blow to the district, she said.
The fund balance grows slowly and replacing $10 million could take several years, she said.
“At some point, that money is going to run out,” Knight said.
That means that while the district may be able to avoid making some cuts in the coming year using fund balance dollars, it won’t be so fortunate in subsequent years. The end result is putting off the inevitable, Knight said.
“It’s just going to mean a harder fall,” Hartsville Board of Education member Jamie Morphis said.
The state is considering mandatory furloughs for state employees, including public school teachers. While furloughing teachers will save the state money, she said, it will save the school district nothing. The district would see some minimal savings from furloughing administrative employees, she said.
Knight said it is possible the state could give local districts more flexibility in how they use funds that could help in dealing with any reductions. But that is not a certainty, she cautioned.
The school board has not yet scheduled any work sessions to discuss the budget or funding situation, Knight said. She said until officials know more from the state, there is little point in doing so.