In what’s shaping up to be one of the district’s worst deficits in recent memory, Cobb school officials are at a crossroads on how to deal with a 10 percent shortfall in the budget.
Board members recently rejected a list of cuts superintendent Michael Hinojosa's staff had proposed, which included getting rid of 295 teaching positions through attrition.
To avoid drastic cuts, the board instead wants to pull millions more from the district’s already-battered savings account. That’s a move Hinojosa warns could make next year’s deficit worse and require a district nationally recognized for its conservative financial management style to borrow if an emergency should arise.
Despite a recent uptick in the economy, property taxes collected by many school districts are still far below what the districts were used to before the recession. And the state has cut the amount of money it gives to school systems.
Surrounding districts’ budget outlooks aren’t as bleak as Cobb’s.
Gwinnett, the state’s largest district, doesn’t anticipate a deficit and plans to eliminate two furlough days, maintain its current class sizes and hire 18 school resource officers.
Fulton’s administration doesn’t anticipate furlough days and gave employees bonuses last year.
“We feel that we’re in good shape,” said district spokeswoman Susan Hale.
But Cobb administrators predict they will receive $27.3 million less in local tax revenue next year than they received this school year.
Since 2003, the state has failed to pay Cobb almost $425 million, according to the Quality Basic Education (QBE) funding formula.
Cobb County school officials have kept the district debt-free while holding the millage rate steady and maintaining tax exemptions. The district claims to have the lowest administrative costs in the region.
But years of paying recurring costs with savings and leftover sales tax revenue have allowed the district to avoid the sort of severe cuts surrounding districts have made in recent years.
This fall’s projected deficit of $86.4 million is $24 million more than this year’s deficit.
For this school year, the district furloughed its staff for two days, eliminated 350 teaching positions and covered some costs by using $28.2 million from reserve funds.
For the 2014-15 school year, the district expects to spend $894 million but bring in only $807.6 million in revenue.
Hinojosa recently suggested shifting a large portion of high school classes online, axing transportation for thousands of students and outsourcing custodial services. He also proposed forgoing pay raises, requiring staff to take five furlough days and reducing 295 teaching positions through attrition. Ninety percent of the district’s budget goes toward salaries and benefits.
Board members said the majority of the suggestions were unacceptable and lacked creativity. They suggested other cuts, such as getting rid of in-school suspension, cutting out professional development and travel for a year, getting rid of benchmark testing and not purchasing new textbooks.
For the past several weeks, parents and teachers have bombarded board members with letters and phone calls in a desperate effort to save programs and services they’ve become dependent on such as transportation to magnet schools and after-school programs.
Several board members have committed to not raising the millage rate. They want to pull money from the district’s reserves.
“I think the taxpayers gave us this money to put into the classroom, not to save in a savings account or be a pot of gold to sit out there to say we’re financially healthy,” said board member David Banks.
If board members pull more money from its fund balance reserve, the cuts will be “less painful in the short term, more painful in the long run,” Hinojosa said. “Next year, we’ll be right back in this situation.”
Hinojosa is set to make a new proposal to the board this Wednesday with more options from which board members can pick and chose.
Administrators recently placed an eight-minute video on its website explaining its budget woes. To the backdrop of dramatic orchestral music, a deep-voiced narrator warned the public of looming cuts and encouraged citizens to get involved in the process.
“We’ve experienced a little bit of a derailment,” Hinojosa said. “In August, there will be 107,000 kids expecting a great education, and we’re going to have to provide that for them.”
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