PE Approves Budget

Published 4:42 pm Tuesday, May 1, 2012

PRINCE EDWARD – County schools will receive the same amount of local funds as last year and there will be no tax increase.

Supervisors-having met with the school board, held a public hearing and several budget work sessions-met Thursday afternoon and, with no additional changes, unanimously (minus Farmville District Supervisor Pattie Cooper-Jones who was not present) approved a $50,953,192 budget.

Supervisors also approved a $25,666,080 school budget that includes $8,106,652 in local revenue as a transfer from the General Fund as well as a $1,087,070 for the school cafeteria fund (which does not include local revenue).

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The tax rates will remain at 42 cents per $100 of assessed value for real estate and mobile homes, 70 cents per $100 of assessed value for merchant's capital, $4.50 per $100 of assessed value for motor vehicles, business furniture and fixtures and heavy equipment, $4.20 per $100 of assessed value for machinery and tools, a zero for farm machinery and equipment.

Chairman Remarks

“Much of the public discussion, both at Board meetings and in letters to the newspaper, has focused on the funding for the schools,” Board Chairman William “Buckie” Fore commented prior to the board taking action. “I want the public to clearly understand that the funding reductions the schools are facing are all the result of decreases in funds provided by the state and increases in expenses that are mandated by the state.”

He also cited, “…I want it to be crystal clear that education is the number one priority in the County budget; no other department receives even a fraction of the amount of funding that we provide to the public schools. However, the board must provide funding to serve the needs of all of our citizens, and that includes law enforcement, public safety, social services, waste management, courts and education. And the majority of our citizens can only afford to pay so much.”

Fore, who had assessed “many of our residents” can't afford to pay more local taxes with the economy still weak, assessed that none of the board members-judging from the statements at the prior work session-supports an increase in local tax rates.

The chairman also highlighted that since 2008, local dollars for education have increased by approximately $450 per pupil and that the amount provided by the state has fallen by about $540 per pupil, representing a reduction of approximately $1.2 million in state funding.

“Some residents have stated the board needs to think outside the box and develop new sources of revenues,” Fore stated. “We don't disagree. Our problem is that over the years the General Assembly has created stronger and stronger boxes to restrict the flexibility of local governments to raise local revenues.”

Specifically, he cited, the Dillon Rule, which essentially states that local governments (in Virginia) can only exercise powers expressly provided in the state Code.

The County is unable to create a higher real estate tax rate for those who can afford it (forbidden by the state's constitution), increase the local sales tax (which can only be done by the General Assembly) and isn't allowed to have a luxury tax (the General Assembly has not given localities that authority).

Chairman Fore also cited that there “appears to be a strong misperception concerning supposed funding provided by the County for Granite Falls Hotel and the revenue sharing project for the new Route 786.” He cited that “there is not one single dollar in the County budget that will be spent on that hotel.”

The road project, he further detailed, is being funded by a combination of funds from the Virginia Department of Transportation and borrowed funds “which the hotel developer has agreed, in writing, to pay on behalf of this County.” In the worst-case scenario the hotel is not built, the annual debt service for the road is $97,000 per year.

“…There are other options available to the County to recover its investment, even if the hotel is not built. And, while the $97,000 is a sizeable amount of money, it is way short of the amount the School Board has stated that it needs,” Fore said. “The bottom line is neither the hotel nor the road make an impact on the County budget or the funds available for the County schools.”

“I will add that when the hotel is built and the road is complete, the County will receive hundreds of thousands of dollars in new tax revenues that the board can use to fund needed projects and other operations in the county.”

Fore also noted that since the announcement of the road project, the County has been contacted by developers expressing an “interest in locating other projects in our area. Such projects would create even more jobs and more revenue for our county.”

Gantt Addresses Matters

Leigh District Supervisor Don Gantt proposed that the school have more flexibility with their budget. He asked the board to give the school board and the superintendent the leeway to move money around as they see fit, and for the school to retain overages at the end of the year.

As for the school board budget, Gantt said he's looked at it and can't tell what's fat and what's not.

“I can tell you this, and this is the elephant in the room, when money's been good, when funding's been there, we've ended up in the bottom five percent of the nation for schools,” he said.

He would also note that he wants “to see change that I have not seen” and offered that the board of supervisors is going to have to develop a different relationship with the school board and hold them more accountable.

Chairman Fore cited that they have appointed the school board to run the schools along with the superintendent. He added that their direct responsibility stops with funding. Still, he said he understood where Gantt was coming from and that it would be good if the superintendent and the county administrator got together and came up with an idea to form some type of committee-suggesting school board members and private citizens-“to work out something like you're talking about and then bring that back before the board and get the board of supervisors to approve it.”

County Administrator Wade Bartlett noted that if he met with the superintendent, “all that would have to go through the school board and meet their approval.”

Gantt cited a need for the process to develop quickly.

After the meeting, Division Superintendent Dr. David Smith told The Herald that being able to carry over unexpended funds would “be a real help. That's an unknown amount every year, you can't budget for that, but as the year goes on there are lots of reasons that planned expenditures change, sometimes up or down. Sometimes revenues or grant funds increase or decrease during the year, so that's why there's got to be some leeway. And, being able to carry over funds into the next school year would provide some budget relief, especially in extremely tight budget years like this.”

As far as budget flexibility, Dr. Smith noted that the board of supervisors appropriates funds by category as opposed to in a lump sum. What was being suggested, he assessed, was being able to transfer money across categories without coming to the board of supervisors.

“That would give a lot of increased flexibility to the school board as needs change or revenues change during the course of the year,” Dr. Smith said.

School Contribution

Gantt would also note that he had a few citizens calling him wanting to raise taxes and that he explained to them how he felt about it.

However, he also said he wanted to give them the opportunity to do it, noting that he's asked the county administrator about talking with the commissioner of revenue and treasurer about adding a line to the tax tickets that will allow citizens to overpay or make a donation to the school. The monies, he explained, would go separate to the school board and used at the discretion of the superintendent.

“It looks like it's an easy thing to do and it may generate a hundred, two hundred thousand or more-I don't know,” Gantt said. “But, for those of you who want to pay extra, I think this would be the best way to do it.”

School Decisions

With the school funding now set, it will be up to the school board to determine how those funds are spent. Already on the table are $1,182,289 in proposed Level I cuts, and-barring a school board change on that list-they would need to trim about another $465,000 and the board has a prioritized list of $785,000 of possible additional cuts to draw from. (Factoring the board of supervisors decision to allow the school division to use a nearly $200,000 reduction in debt service for the operating budget and a state budget that now includes about $130,000 more in funding helped reduce the amount of expected cuts.)

The school board will be tasked with finalizing what will be on the lists and cut.

“We appreciate the support of the board of supervisors,” Dr. Smith said after the meeting. “We appreciate the difficulty of this budget year that they have faced as well as the school board has faced. And the reductions that the school board has to make are painful, they affect children in classrooms. We will, of course, move ahead with those reductions and achieve a balanced budget.”

School Board Chairman Russell Dove would also tell The Herald after the meeting that he is grateful for the funds they did provide-especially those beyond what is required as a required match. “But I'm still very concerned about the deficit and the impact it's gonna have on our kids and the programs in the future.”

If they decide to work from the Level II cut list, Dove noted he's looking at seven to eight positions and programs at the minimum.

That, the school board chairman highlighted, will be on top of the budget reductions they've done in the past three or four years.

“Some people say trim your fat,” Dove laughs, “But…we've already trimmed the fat. We're down to muscles and tissues and all now…I'm just really concerned the impact it's gonna have on our future. People talk about economic development, but I still say the number one thing you can do for economic development is education development…You gotta have a good education base for economic development.”

One of the items on the list of Level II cuts is a one percent pay increase for school workers. While he would still like to see some percentage of an increase, Dove said he would have to weigh that against exactly what position or positions that may save.

“…I think they deserve it, yes, but it'll really come down to me weighing against what positions we'd have to lose in lieu of that,” Dove said.

That prioritized potential Level II cuts list include possibly cutting a division gifted resource teacher ($64,980), a position that has been advertised this year but not filled; middle school special education teacher ($64,980); transferring middle school teacher to be funded with grant monies ($64,980); elementary computer teacher ($64,980), shifting the individual to a currently vacant ITRT position at the elementary school and possibly being able to help with the computers and teachers and support for students while covering the ITRT position; high school German teaching position ($64,980); an additional elementary teaching position ($64,980), which could not be in first-third grades to maintain classroom ratios tied to state funding; combining the agriculture/horticulture position ($64,980); reducing an art teacher position at the high school to half-time ($32,490); a band teacher position ($64,980) – so there would be one teacher to cover both the middle and high schools; and eliminating the proposed one percent salary increase.

The list of Level I reductions penciled in (totaling $1,182,289) includes positions in the budget but not filled for 2011-12 ($175,825), elementary Spanish program with two teaching positions ($129,960); reduction of an elementary teaching position ($64,980); five elementary school instructional aide positions ($105,000); two teaching positions at the middle school ($129,960); high/middle school Read 180 program with 1.2 full-time equivalent positions ($64,980) and support services and materials for the program ($20,990); elimination of the ROTC program ($64,980); high school special education teacher position through attrition ($64,980); reduction of one special education administration position ($72,700); division-wide purchased services for special education ($10,000); elimination of one support position at the school board office ($59,114), savings factored under an energy maintenance contract ($82,800); division-wide miscellaneous pay ($20,000) tapping into other program funds to serve students, materials and miscellaneous pay for transportation ($40,000), and division-wide operational expenditures (totaling $81,000).

The school board is expected to meet in the coming weeks to finalize where the budgeted dollars will go for the coming fiscal year.