The Gainesville City Schools Board of Education gave its first OK to the 2011-2012 budget Monday night but had to dig hard into reserves to make ends meet.
The budget was set at $67 million in total expenses, with nearly $53.8 million of that amount in general fund operations covering teacher salaries, school upkeep and other such expenses.
School officials built the budget using the same tax rate as this year, or 7.39 mills, with 1 mill equal to $1 for each $1,000 in assessed property value. Property is assessed at 100 percent in the city.
So, because of falling property values, the projected amount of property tax revenue is expected to drop to $21.3 million in fiscal 2012, which begins July 1. The city had budgeted $23 million for the current fiscal year.
The total amount of projected revenues for next fiscal year is $50.6 million, leaving a $3.2 million hole in the budget that officials are filling by pulling from surplus funds.
The system is drawing the “fund balance,” or surplus, down to $1 million.
“You’d like (that amount) to be 10 to 15 percent of your budget,” or $5 million to $7 million, said finance director Janet Allison.
School board member David Syfan asked Allison if she thought the city “had a shot” of making up the $3.2 million loss, “so that when we begin the (2012-2013 budget year), we’ve got some shot at ... a sufficient fund balance to (pay for) any deficit that we need to fund in that budget.”
“Frankly, I worry about it, because the crystal ball is more fuzzy right now than it has been in a number of years,” Allison said.
She said the tax picture should begin to clear in the fall, after the county typically completes work on its tax digest, or list of taxable properties. The school board typically doesn’t set the tax rate until after that occurs.
Also, “we’ve done benchmarking the last several years, telling the principals and department heads that by this date you should not have spent more than X percentage of your budget,” Allison said.
“They have done very well with holding back, and we would have to hold back with our expenses (again),” she added.
“We would have to watch them as closely as we have — and even more so, I would think, than the last couple of years.
Superintendent Merrianne Dyer agreed.
“We have to do whatever we have to do. If we lose personnel, we’ll do what we did the first year after coming out of our (budget deficit),” she said. “If we lost personnel, we didn’t replace them. We have other options with the work schedule.”
“I just worry that class sizes are where we need to stop if we can help it,” Syfan said.
“There’s no two ways about it — (the budget) is going to be a challenge,” Allison said.
And general fund expenses are rising next year, increasing from $50.6 million this year. One major expense is 20 new teachers, which translates to $1.3 million in salaries and benefits.
Also, the system is having to spend $220,000 more for the employer share of health insurance for just classified employees, or those without teaching certificates.
The school board plans to adopt the budget at its regular monthly meeting set for 7 p.m. June 20.