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Uncharted Territory for Cobb County School District – 2011 Budget

June 29th, 2010 |

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School Board Approves FY 2011 Budget
Reductions, Other Steps Taken To Address $126.7 Million Shortfall

The Cobb County Board of Education has approved a balanced budget for Fiscal Year 2011 that required numerous difficult steps to address a $126.7 million shortfall. The budget gap resulted from a significant drop in the school district’s two primary sources of revenue – state funding and local property tax collections. Since 2003, the state of Georgia has implemented austerity cuts that have reduced funding for Cobb County schools by more than $208 million. Additionally, local property tax collections in 2010 decreased by approximately 10 percent.

The spending cuts and other steps taken to address the $126.7 million shortfall follow a budget year in 2010 that itself required more than $97 million in cuts, including a 2-percent pay reduction for all employees. The balanced budget presented by Superintendent Fred Sanderson and approved by the Board of Education at its June 9, 2010 work session attempts to sustain the highest level of educational service possible under the challenging economic circumstances.

“This has been an extraordinarily difficult budget cycle, the worse I’ve seen in my 35 years as an educator,” said Superintendent Sanderson. “To face this kind of deficit one year after cutting almost $100 million is hard to imagine. Under the circumstances, I believe we’ve presented a budget that takes the most equitable approach to spending reductions. Education is very personnel-oriented, and that means about 90 percent of our budget is represented by salaries for teachers and other staff. To find savings that would help close a $126 million gap, we had no choice but to cut positions, but we did so as strategically and fairly as possible. Cutting jobs is the last thing I want to do, especially in this economy, but following a year where we had already lowered all employees’ salaries, we had no better options.”

In April, the school board conducted a community-wide survey to gauge public opinion on the budget crisis. One item asked respondents to rate various cost-cutting options. Of the more than 21,000 responses, the options that received the most favorable responses included reducing the school year by five days and increasing the millage rate. The option that received the highest percentage of “unacceptable” votes was reducing pay for employees.

The FY2011 General Fund budget anticipates $819,380,347 in revenue compared to $907,469,792 in budgeted revenue for FY2010. The FY2011 budget anticipates $819,376,569 in expenditures compared to $907,466,771 in budgeted expenditures in FY2010. The budget is based on a predicted enrollment of 105,205 students. Expenditures per student total $7,788, compared to $8,648 per student in FY2010. The approved budget results will not increase the school property tax rate.

Spending reductions and other steps taken to address the $126.7 million
budget shortfall include:

Reducing 68 central office and support positions ($8.1 million)
Increasing to maximum class sizes and reducing 636 teaching positions ($47.4 million)
Avoiding millage rate increase by using SPLOST II excess funds ($23.6 million)
Five furlough days for all school district staff ($15.9 million)
Freezing school salary step for all eligible employees ($10 million)
Reducing 55 school counselor/graduation coach positions ($4.5 million)Reducing 112 custodian positions ($3.9 million)
Eliminating 100 buses, corresponding routes and driver positions ($2.9 million)
Reducing high-priority pay account ($2.3 million)
Restructuring alternative education program ($2 million)
Reducing Maintenance Department ($1.1 million)
Reducing 20 Additional Day funding ($1 million)
Decreasing instructional supply allotment ($1 million)
Reducing school year by five days ($1 million)
Increasing transportation fee for field trips ($190,860)
Parking buses within five miles of first pick up ($75,000)
Redirecting contributions for dental coverage for all employees ($750,000)
Reducing to state-allotted sick-leave accrual ($183,000)
Reducing substitute pay by $10 per day ($799,888)

Increasing class sizes creates the greatest budget cost-savings – as class sizes increase the district needs fewer teachers. Earlier this month, the Georgia Department of Education waived all restrictions on class size to help school districts across the state contend with the economic crisis. In Cobb, where class sizes already were well below the state maximum at every grade level, schools can expect to see classes increase on average by approximately three students. That number is averaged, so some classes may be higher and others lower. As an example, core classes in high school can expect to see class sizes of no more than 35 students.

“This is uncharted territory for our school district,” said School Board Chair Lynnda Crowder-Eagle. “We’re experiencing what so many private corporations have been through in the past couple of years. I am deeply sorry that the budget we approved results in job reductions, but I have no doubt the Cobb County School District will continue to offer the very highest quality education, and our teachers and administrators will rise up to meet this challenge as they always have. Through their commitment, the Cobb County School District will persevere and maintain its reputation for academic excellence.”

Reductions in state and local revenue are the primary causes of the budget gap, but there are other factors that impact the school district’s operating budget. Cobb County tax exemptions are among the most generous in the State of Georgia. Two of the most popular exemptions are the Age 62 Exemption and the Homestead Exemption. Cobb County qualified homeowners who are age 62 or older as of January 1 are fully exempt from school property tax. Qualified homeowners are entitled to a $10,000 Homestead Exemption in the school general tax category. In total, Cobb County tax exemptions will reduce school district revenue by more than $100 million.

The approved FY2011 budget also includes more than $8.7 million in Federal funding from the American Recovery & Reinvestment Act. Those dollars no longer will be available after next school year.

In September 2008, Cobb County voters approved a five-year extension of the Special Purpose Local Option Sales Tax, but SPLOST funds are designated for specific capital projects and cannot be used for day-to-day General Fund operating expenditures. Therefore, SPLOST funds cannot be used to directly offset the $126.7 million General Fund deficit. However, the Board of Education was able to declare more than $23 million from the SPLOST II program as “excess funds”. For a district such as Cobb, state law requires that any excess SPLOST funds be used to lower the property tax millage rate.

Because of the current shortfall, the school board anticipates having to raise the millage rate from the current 18.9 mills to the state maximum 20.0 mills when it meets in July. Declaring SPLOST II excess proceeds equal to 1.1 mills will allow the millage rate to remain unchanged at the current rate of 18.9. The approximate value of the excess declaration is $23.6 million.

Cobb County property owners will see no change in their school property tax rate.

Details of the FY2010 Cobb County School District budget, as well as video presentations from its development, are available online at http://www.cobbk12.org/centraloffice/finance/budget.htm.

Call or Email me today for all of your Real Estate needs! Jodi Smith, East Cobb Realtor with Keller Williams Realty Consultants. Helping you find Homes in East Cobb, Homes in Marietta, Homes in Roswell and Homes in Alpharetta. CELL: 678-763-6025 or EMAIL: jodismith@kw.com

The Cobb County Board of Education has approved a balanced budget for Fiscal Year 2011 that required numerous difficult steps to address a $126.7 million shortfall. The budget gap resulted from a significant drop in the school district’s two primary sources of revenue – state funding and local property tax collections. Since 2003, the state of Georgia has implemented austerity cuts that have reduced funding for Cobb County schools by more than $208 million. Additionally, local property tax collections in 2010 decreased by approximately 10 percent.

The spending cuts and other steps taken to address the $126.7 million shortfall follow a budget year in 2010 that itself required more than $97 million in cuts, including a 2-percent pay reduction for all employees. The balanced budget presented by Superintendent Fred Sanderson and approved by the Board of Education at its June 9, 2010 work session attempts to sustain the highest level of educational service possible under the challenging economic circumstances.

“This has been an extraordinarily difficult budget cycle, the worse I’ve seen in my 35 years as an educator,” said Superintendent Sanderson. “To face this kind of deficit one year after cutting almost $100 million is hard to imagine. Under the circumstances, I believe we’ve presented a budget that takes the most equitable approach to spending reductions. Education is very personnel-oriented, and that means about 90 percent of our budget is represented by salaries for teachers and other staff. To find savings that would help close a $126 million gap, we had no choice but to cut positions, but we did so as strategically and fairly as possible. Cutting jobs is the last thing I want to do, especially in this economy, but following a year where we had already lowered all employees’ salaries, we had no better options.”

In April, the school board conducted a community-wide survey to gauge public opinion on the budget crisis. One item asked respondents to rate various cost-cutting options. Of the more than 21,000 responses, the options that received the most favorable responses included reducing the school year by five days and increasing the millage rate. The option that received the highest percentage of “unacceptable” votes was reducing pay for employees.

The FY2011 General Fund budget anticipates $819,380,347 in revenue compared to $907,469,792 in budgeted revenue for FY2010. The FY2011 budget anticipates $819,376,569 in expenditures compared to $907,466,771 in budgeted expenditures in FY2010. The budget is based on a predicted enrollment of 105,205 students. Expenditures per student total $7,788, compared to $8,648 per student in FY2010. The approved budget results will not increase the school property tax rate.

Spending reductions and other steps taken to address the $126.7 million
budget shortfall include:

Reducing 68 central office and support positions ($8.1 million)
Increasing to maximum class sizes and reducing 636 teaching positions ($47.4 million)
Avoiding millage rate increase by using SPLOST II excess funds ($23.6 million)
Five furlough days for all school district staff ($15.9 million)
Freezing school salary step for all eligible employees ($10 million)
Reducing 55 school counselor/graduation coach positions ($4.5 million)Reducing 112 custodian positions ($3.9 million)
Eliminating 100 buses, corresponding routes and driver positions ($2.9 million)
Reducing high-priority pay account ($2.3 million)
Restructuring alternative education program ($2 million)
Reducing Maintenance Department ($1.1 million)
Reducing 20 Additional Day funding ($1 million)
Decreasing instructional supply allotment ($1 million)
Reducing school year by five days ($1 million)
Increasing transportation fee for field trips ($190,860)
Parking buses within five miles of first pick up ($75,000)
Redirecting contributions for dental coverage for all employees ($750,000)
Reducing to state-allotted sick-leave accrual ($183,000)
Reducing substitute pay by $10 per day ($799,888)