By Kathryn Schiliro
Managing Editor

In the interest of clarity, a closer examination of the Morgan County Board of Education's (BOE) budget – which is in the midst of its legally required advertisement prior to a BOE vote – is in order.

Revenues
As far as fiscal year (FY) 2013's projected revenues, the school board is projecting more than $11.7 million in ad valorem taxes will be collected in FY 13.

In FY 12, the BOE projected more than $11.3 million would be collected in ad valorem taxes. As of the school board's last meeting, more than $13.2 million had been collected in ad valorem taxes.

It's important to note that ad valorem taxes can come in from previous fiscal years and be counted in the current fiscal year, i.e. ad valorem taxes are counted as part of the fiscal year when they arrive.

Additionally, Superintendent Dr. Ralph Bennett said Friday he's anticipating the school board will adopt the roll-up millage rate later this summer. However, that's yet to be decided.

Real estate transfer and intangibles taxes are projected to increase more than $3,000 from $122,000 in FY 12 to more than $125,000 in FY 13. Projected revenues from other local sources decreased $35,000 in FY 13: from more than $193,000 in FY 12 to more than $158,000 in FY 13.

A pleasant surprise for the BOE, revenues from state sources in FY 13 are projected to be more than $13.3 million, up more than $984,000 from FY 12. Superintendent Dr. Bennett attributes the increase in state funding to charter school grant funding and a more accurate enrollment count as well as Local Fair Share funds.

The school board's projected total revenue for FY 13, then, comes to more than $25.3 million, a decrease of $428,000 from FY 12. Bear in mind that in FY 12, the school system also had funds from a one-time more than $1.7 million Education Local Option Sales Tax (ELOST) rollback to fall back on; they didn't have that funding this fiscal year.

Add the more than $8 million in reserves – more than $5.9 million of which is kept on hand for school system payroll from July to December, the remainder (which will be in flux for three more months as FY 12 concludes) being the $2.1 million beginning balance of the reserves – and the school system's total revenue, including reserves, comes to more than $33.4 million.

Expenditures
When it comes to the BOE's expenditures, direct instruction – basically teachers' salaries – is by far the largest expense. The BOE is projecting almost $19.6 million will be spent on direct instruction in FY 13. This is a decrease of more than $579,000 in projected direct instruction costs from FY 12. To date, with FY 12 nearly complete, the school board has spent more than $16.8 million on direct instruction.

As far as school administrative salaries, the BOE is projecting spending more than $1.7 million in FY 13, a decrease of more than $96,000 from FY 12. Meanwhile, the FY 13 projected cost of system administrative salaries is $428,000, down $73,000 from FY 12.

The FY 13 projected cost for pupil services is more than $908,000, down more than $133,000 from FY 12. The projected cost for educational media services is down more than $10,000 from FY 12. The FY 13 projected cost for the system's business and finance services decreased $29,000 from FY 12 to more than $257,000. The projected cost of maintenance and operations decreased more than $61,000 to more than $1.9 million in FY 13.
As far as increasing expenditures, the projected cost of pupil transportation came up more than $60,000 in FY 13 to more than $1.3 million; staff and technology improvement and development increased more than $140,000 from FY 12 to more than $202,000; and "Other Support Services" increased more than $146,000 to more than $158,000 in FY 13. The increase in "Other Support Services" and staff and technology improvement and development comes from the reclassification of varying items, an order from state auditors, Bennett said.
The BOE's projected expenditures for FY 13, then, come to more than $27 million.

Add the more than $6.3 million in reserves – $370,000 projected at the end of FY 13 and the more than $5.9 million consistently kept on hand for payroll from July to December – and the total reserves and expenditures ending balance is more than $33 million.

Budget Cuts
FY 12 projected expenditures totaled more than $27.7 million, while FY 13's projected expenditures total more than $27 million, a difference of $636,000.
"While this is the projected net decrease, it should be noted that the actual cuts made by the board totaled $1,423,261," Bennett wrote in an e-mail. "These cuts were offset by increases in salaries and benefits of $782,458, which we've noted are beyond our control."
Bennett goes on to write that school system employees will be "living with a loss of income totaling $935,898."
This year, the school board eliminated 10 days from teachers' work calendar, a move that saved the school system more than $1 million. In fact, just this month the BOE unanimously voted to eliminate the final two days – student days – from the 2012-2013 calendar.

Reconciling

Reserves are kept on their own; the BOE's Budget Committee doesn't count them when working on the budget. So, the BOE is planning to reconcile the more than $1.7 million difference between FY 13  total revenues – more than $25 million – and total expenditures – more than $27 million – by applying the more than $2.1 million beginning balance to that difference, leaving the BOE with an ending reserve balance of $370,000.

Printed in the June 21, 2012 edition