By By PAUL KEANE – Special to The Standard
(Editor's Note: This is the first in a six-part series looking at the funding crisis area schools are facing and alternatives to providing additional funding for the system. Today's installment provides a general overview of the situation being faced by administrators.)
Refinancing debt, consolidation loans, getting a better job that pays more, cutting back on expenses - everyone, it seems, has faced these decisions from time to time when faced with a household budget crunch. Economic hardships happen and people naturally adjust accordingly.
Imagine that crunch multiplied by millions of dollars - with funds shrinking and no new revenue streams guaranteed - and you have a small idea of the budget crunch school districts around the state are facing.
Escambia County's district is no different, as Superintendent Melvin "Buck" Powell learned last week to expect a $1 million cut in state funding and that the City of Atmore would no longer be making contributions to the district via a city sales tax. The two cuts amount to more than $1.25 million in funding, a large part of a deficit Powell and his staff faces as it prepares for next school year's budget.
Powell said those cuts could come in personnel, but that most personnel cuts have already taken place. The next move would be to start looking at programs to cut.
When Powell took over as superintendent more than two years ago, the system used local funds to hire 38 teachers over the state limit. Traditionally, the state will fund the salaries and benefits of a limited number of teachers based on enrollment numbers. Any teachers hired above that number must be funded through local means.
The number of locally funded teachers is now down to 14, and Powell said more cuts are needed.
Powell has said in the past that some of the cuts could be absorbed through attrition, mainly through teachers and staff retiring, moving away from the area, or leaving the teaching profession altogether. A concrete number on how many positions that would be is not known this early in the school year.
The problem is one that will require great scrutiny and the help of many residents and community leaders, Powell said.
The final of three such meetings is scheduled for Thursday at 6 p.m. at Escambia County High School. The public is invited and encouraged to attend.
The main thrust of the meetings has been to advocate an increase in the ad valorem taxes for education. Those taxes have not been raised since 1925 and Powell said an increase would help solve many problems.
The millage has remained at about the seven mills level for nearly 80 years because of a combination of factors. Cities have increased their sales tax and earmarked that for education, the county took similar action and the oil and gas severance tax has helped keep local funding nearly level for most of the time.
The county's sales tax for education requires a percentage of the first amounts to go to the county before heading to the school district and the oil and gas severance tax has decreased significantly in the past few years.
Add in the fact the state announced a 6.2 percent cut in funding – often called proration – three years ago, and things began to get tight.
Powell and other superintendents began dipping into the reserves of their districts, with many districts depleting those funds. The state requires districts to keep the equivalent of one month's operating capital in reserve at all times and many districts are feeling the crunch of having expenditures and not enough revenue to cover all the bills.
Powell said an increase in property taxes would help the local school district weather the storm and even begin moving forward and out of the proration era that dwindled the system's reserves down to nearly nothing except the required amount to operate on for one month.
Survival may mean a combination of things to the system, including an additional sales tax that could be temporary or permanent or even borrowing against the assets of the system in order to operate. Even if voters immediately approved an increase in property taxes, conservative estimates are that the first proceeds of such a tax would not be realized until 2004.
That leaves nearly an entire school year to pay for before a tax would take effect and begin returning dividends.
Privatization of some operations has also been considered, but Powell questions how much money that would save.
That leaves cutting personnel and programs, options Powell and his staff are considering.
Powell, a former football coach, doesn't rule out the possibility of closing some or all athletic programs in order to make necessary cuts.
Powell also is entertaining the idea of opening school later in the fall and keeping it open until the summer, giving the district some breathing room to build up a reserve. "We may have to start school in October and go through July," he said. "That is one option being discussed."
Powell said the 10 mills increase would give the system enough breathing room to weather the storm, but that it may or may not provide adequate shelter.
(Next: Does more funding mean better performance?)