Clayton schools to lose $27 million in state funds

Clayton County’s schools stand to lose about $27 million in state money next school year after more than 3,200 students fled the district when it lost its accreditation.

Chief financial officer Roger Reese warned school board members Monday that the system will have to consider a wide range of cuts, such as layoffs, reducing employee benefits and other measures to compensate for the loss of state money caused by the decline in enrollment.

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Clayton County news

“There will be some challenges for this district next year,” Reese said.

Clayton is the third metro school system to discuss budget problems this month. DeKalb County school officials approved plans to cut more than $20 million by next year. The system expects to lay off 127 employees after the school year ends.

In Decatur, city schools officials have started discussing ways cut $2 million out of next school year’s budget.

Clayton’s problems have been exacerbated by a Sept. 1 decision by the Southern Association of Colleges and Schools to revoke the school system’s accreditation.

The loss of accreditation means the district’s nearly 49,000 students could have trouble getting into some colleges and universities or receiving scholarship money.

The district’s current budget is about $617 million, spokesman Charles White said.

Reese’s presentation was to prepare board members for the work they will do on the 2010 fiscal year budget, which covers the 2009-10 school year.

About two-thirds of the $27 million Reese predicted the district will lose is because of the large number of students who left the district.

The amount of state money school districts receive is tied to enrollment. If enrollment goes up, districts get more money. If it goes down, they lose money.

The district could lose even more money if the enrollment drops again when an official enrollment count is conducted in the spring, he said.

Staff members said the board would not make any immediate decisions. Suggested cuts shared with board members Monday night include decreasing the number of employees; reducing overtime and travel budgets; changing work schedules for 12-month administrative employees; and reducing benefits for part-time employees.

Reese’s presentation drew little reaction from board members, but at least one parent was shocked by the amount of state money the district stands to lose.

“I don’t know where they’re going to make these cuts because it’s not like we have a huge overflow of people or programs now,” said Yolanda McCrory, the PTSA president at North Clayton Middle. “Hopefully we won’t lose our teachers and our programs. They need to find a way to get us more money, maybe they need to ask the business community to help us out.”

Board members will not begin working on next year’s budget for several months, but they have received grim news lately.

Superintendent John Thompson has repeatedly told board members that the troubled system would face budget problems because of state cuts in school funding, the sour economy and reduced property tax revenue caused by Clayton’s high foreclosure rates.

About two weeks ago, Thompson said the school district would lose $10 million to $15 million in federal money because of the enrollment drop.

Thompson said the district’s $34 million reserve fund does not provide a large enough cushion for the system in the future.

He said “the board will be called upon to make some tough choices in selecting the best path forward.”