(T-G Photo by Tracy Simmons) [Order this photo]
Chairman Barry Cooper raised the possibility that the state might force an increase in the budget, rather than a decrease, in order to meet the state's maintenance of effort law.
Last week, the county commission approved tax rates and all county budgets except the school system's, shifting six cents per $100 assessed value from the school system's tax rate to the debt service tax rate. The change was made without debate and discussion.
Some commissioners said they didn't realize what they were voting on until after the fact, and seven commissioners have signed a request that the tax rate change be reconsidered when the commission holds its fiscal-year-end meeting next week.
Commissioner J.D. "Bo" Wilson, who proposed the shift, said it would still leave the school system at its maintenance of effort target and would improve the county's debt service budget, which has suffered from decreases in investment income.
Wilson said the school system would ultimately benefit, because only when the county pays down old debt can it take on the new debt required to build a new Cascade High School.
School system officials had said that their original budget, before the six-cent cut, was tight. It's a deficit budget that balances only by reducing the school system's fund balance to what board members said is an inappropriately-low number. The board had even toyed with asking for a property tax increase when it originally submitted the budget.
If the six-cent property tax cut is upheld, the school system will have to find a way to cut $438,000 out of its operating budget.
Cooper noted that the school system's property tax rate has stood at $1.02 for some time. Normally, even with the same rate, there's some natural growth in overall tax revenues from year to year, said Cooper.
Cooper passed out figures showing the growth of fixed costs such as electricity, water and sewer, and diesel fuel over the past several years, and said that if the six-cent cut were to stand, and school population were to continue to grow as it has in the past, the county would be spending $90 less per student in the 2012-13 fiscal year than it spent five years ago.
Cooper told the board that the state's maintenance of effort target, a complex formula requiring that local government put as much into education each year as it did the previous year, is by no means the gold standard for school funding. He said maintenance of effort is "a nice way of saying 'give the children as little as you can legally.'"
But the formula by which the state calculates maintenance of effort is a complicated one, and local officials never know for sure if the budget will pass until they get the final word from the state.
Cooper stopped by the school system's central office for a meeting, he said, and a state fiscal consultant happened to be in the office. He said he discussed the $438,000 cut with her and she informally ran a few figures.
She told Cooper that, based on the "cash match" component of the maintenance of effort test, not only would the reduced budget fail the maintenance of effort test, even the school system's original budget would fail. According to those informal figures, it would actually take a property tax increase of six cents to meet maintenance of effort.
"That's her professional opinion," clarified Cooper.
For now, though, the school board decided to stand by and resubmit its original budget request.
The motion to resubmit passed by a 7-0-1 margin. Leonard Singleton was absent and Diane Neeley abstained, saying later that the school system needs to keep a handle on some of its spending.
Neeley said that the school system's part of funding an exchange trip to China by several educators should have been discussed in advance by the school board. The bulk of the project was paid for by Hanban, a Chinese exchange program, although Bedford County School Supt. Ray Butrum said a small amount was taken out of the school's "Race To The Top" funding. Butrum said the expenses were made from within existing and appropriate budget line items.
Cooper responded that overall spending is under budget.
The budget resubmission will go before the county commission's Financial Management Committee, which meets at 4:15 p.m. Tuesday, and then to the full commission, which meets 6 p.m. Thursday. Butrum is, by virtue of his position, a member of the finance committee.
Board member Ron Adcock noted that the school board has had a good working relationship with the county commission for the past decade, and said he hoped it would continue.
"I would like to thank them for what they've done in the past," said Adcock.
County Finance Director Robert Daniel was not present for the meeting, notifying Cooper by cell phone text just as the meeting was scheduled to start that he was ill.