In their first financial reading of the year, Cobb County school officials forecast an $80 million budget deficit for the 2014 fiscal year.
The final figures don’t have to be settled on until June, but the costs of educating more than 107,000 students at 112 schools across the district are rising.
“Please don’t be scared when you first look at it,” Cobb County School District Chief Financial Officer Brad Johnson told the school board Wednesday morning. “We are preparing this forecast with imperfect information. We are trying to make assessments and assumptions. I think this is a good place to start, because it throws the scope of the situation we are facing out there.”
Based on early projections, Johnson is estimating expenditures to reach $887 million next year, but revenues to reach only $807 million.
State law doesn’t allow a school district to run a deficit, so Cobb will have to balance the budget.
In the current 2013 fiscal year, the district is projecting $849 million in expenditures and $821 million in revenue, even after budget cuts and staff furloughs. The difference will be covered using $28 million in reserve funds.
In the 2013 fiscal year, the district avoided raising the property tax rate by applying $20 million in excess funds from a prior special-purpose local option sales tax program. Johnson noted there are no SPLOST funds remaining and there will be no such transfer for the 2014 fiscal year.
But there are added expenses, like restoring $5.8 million worth of furlough days; $10 million in raises; and $5.4 million in increased health insurance payments. And property tax revenue is down in a struggling economy.
“The Cobb County School District does not have a spending problem,” board member David Banks said. “We have a revenue problem.”
School Superintendent Michael Hinojosa said the early stages of the current budget process remind him of last year, which didn’t see much of a change from the initial figures to the final ones.
“I don’t anticipate it getting better,” Hinojosa said. “We have a huge hurdle to overcome.”
The budget has to be in place by June, but Hinojosa said a final figure should be set by May.
How the school district will get to that number — whether there will be increased revenues, spending cuts or furloughs — is still not known.
“This is the beginning of a six-month process. This is just the first volley,” Hinojosa said. “This meeting was not about solutions. There will be plenty of time for that.”
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