The financial outlook of Fayette’s schools is rosier than it has been in years, and consequently the school board is weighing how to prioritize spending versus saving money.
Assistant Superintendent Tom Gray laid out the tentative Fiscal Year 2016 budget for the board on Monday. The budget anticipates a five-percent increase in the tax digest, a welcome change as the digest has been relatively flat for some time. Gray described the five-percent increase as “pretty healthy.”
Combing local revenues with state funding, the revenue for FY 2016 is projected around $177.2 million, which is roughly $7 million higher than the projected revenue for FY 2015.
Factoring in some proposed budgetary increases, Gray said the tentative expenditures for FY 2016 would be around $183.2 million.
Included in those proposed increases are some expanded staff including additional school secretaries at the elementary level, two computer technicians, an instructional technology support position, and a data collection specialist position.
The largest proposed increase is a 1.5-percent Cost of Living pay raise for salaried employees, which would add nearly $2 million to the budget.
If those tentative expenditure numbers are approved, it would amount to a roughly 7.5-percent increase in total expenditures for FY 2016 over the prior year.
The proposed budget has a roughly $6 million spending deficit, though that is offset by an existing reserve fund balance that is projected at around $9,700,000. That nearly $10 million in budget reserves is in excess of the 10-percent reserve target the board set for itself, which for FY 2015 was around $17 million. The tentative budget would leave around $3.7 million in reserve funds above that ten-percent threshold.
Board Member Diane Basham advocated that the school district’s healthy fund balance be used for employee pay raises. She said the lean years the district has just begun to emerge from placed a strain on system employees who went without pay raises while also having to deal with furlough days. The district has since eliminated furlough days and restored its full 180-day calendar while also adding in small pay increases at various points over the last year-plus. Basham said the board should continue to focus on rewarding employees.
“I would really like to see us pushing [pay increases] and turning around and rewarding the people that have been on the front lines for this,” Basham said. “I feel good about the growth of this county that going forward we’re going to see increased revenues coming in. I don’t want to sit up here at the end of next year with lots of money in the bank while continually asking our employees to sacrifice.”
Gray agreed that the district has a goal of increasing pay and remaining “competitive with surrounding counties and across the state.” He noted that Fayette County had taken some measures, like instituting cost of living raises and eliminating furlough days, sooner than other counties in the state. He said, however, that he would “surely” like to be able to propose a cost of living pay raise greater than 1.5-percent for the coming year.
Superintendent Jody Barrow echoed Gray’s point that the district had been adding back budgetary expenditures to benefit employees in small bites. He also said the district has to balance increased pay against expanded personnel which can help reduce class sizes. He also said he didn’t want to propose pay increases that could not be sustained by future revenue.
“Ms. Basham, as an economist, I know you know the recession will come at some point again, you just don’t know when,” Barrow said, referencing Basham’s career teaching economics. “I have every reason to believe, based on talking business leaders in our community, that [revenue is] going to continue to grow. I think we’re getting ready to see some real strong revenue.”
Board Member Leonard Presberg said he felt the board was already very conservative in maintaining a 10-percent budget reserve and agreed with Basham that funds should be spent where they’re needed.
“I don’t want to keep the money and say we’re worried about something later because we already have that 10-percent [reserve],” Presberg said. ” I”m comfortable with this total spending and this general budget framework is reasonable.”
Board Member Barry Marchman said he was somewhat hesitant to agree to deficit spending when added expenses are ongoing rather than one-offs.
“When I look at deficit spending, I’m ok with building a science lab or doing a one-time expense with this extra money, but I’m a little uncomfortable having projected ongoing deficit spending because of salaries,” Marchman said. He said doing so could put the board back in a tough financial situation in a few years. Presbserg observed that would only be the case if there is “no increase in revenue.”