The stumbling economy will probably force payroll cuts in the Cobb County schools next year, according to tentative projections by system officials.
Early estimates show a deficit of $72.2 million in the budget for fiscal year 2013, which starts in July.
"It’s extremely early in the budget process, and we have virtually no information on our two major revenue sources," Mike Addison, chief financial officer, warned during a School Board work session Wednesday. Even so, he ventured a discouraging estimate by using what he called "reasonable assumptions."
With foreclosures still battering the real estate market, Addison expects a further decline in property tax revenue. He expects a modest increase -- a few million dollars -- from the state, but said his revenue assumptions may be "optimistic."
The school system's general fund budget this year is $851.8 million, but Addison sees expenses growing to $890 million in the next fiscal year. Cuts to accommodate the projected deficit would bring that down to $817.8 million, for an 8 percent decrease.
Expenses are going up largely because of salary increases, rising pension payments and health insurance costs, growing utility bills and the addition of two school days that were eliminated this year by teacher furloughs.
It is far too early to know whether cuts actually will be needed or what form they would take.
After the meeting, Cobb County Association of Educators President Connie Jackson said, “We all expect that there will be more difficulties. It’s not the end of the recession by any means, for anybody.”
Solid numbers will be unavailable until the county tax assessor reports property values in the spring and until the General Assembly meets in the new year.
In the meantime, the school administration is preparing to make tough decisions.
Superintendent Michael Hinojosa said 90 percent of system expenses are for personnel. "It’s going to require some adjustments to our payroll costs," he said.
Wednesday's presentation to the school board was unusually early. In prior years, the budget process got under way closer to the holidays. The early presentation was one of his goals as the new superintendent.
School board member Lynnda Eagle said she appreciated the extra time to contemplate the budget.
"With these deficits," she said, "we know we’re going to have some really big cuts somewhere."
Also Wednesday, Judith Jones, chief academic officer, outlined plans to boost student achievement by selecting a half dozen schools that need to improve. She said the schools, which will be identified in a couple of weeks, will be targeted for "intense intervention."
Officials will assess teacher turnover, student discipline, attendance, leadership and other benchmarks, she said, before imposing changes. She said employees may feel "threatened" and that officials will "walk softly but carry a very big stick."
Then, board members discussed an administrative rule change involving a thorny issue: the academic calendar. A slight majority of the board triggered controversy this year when they abandoned a calendar that drew vacation days from the summer and sprinkled them around the school year.
Hinojosa wants to establish a committee of more than two dozen people to vet the next calendar, which would be in place for two years. The discussion opened old wounds, with board member David Banks complaining about a "lack of respect" from colleagues and board chair Alison Bartlett cutting him off. "I don't want us shooting arrows at each other," she said.
Hinojosa said he'd bring the proposal back for further review at the next board meeting, on Oct. 27.
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