0618BUDGETAUDMatt Cardoza of the Georgia Department of Education talks about what happens if the Gainesville school system can’t approve a budget by June 30.
The debt-straddled Gainesville school system can go into next fiscal year, starting July 1, without approving a 2008-09 budget, but it must account for expenses and revenues through a monthly "spending resolution" it submits to the state.
And because the district faces up to a $6.5 million deficit, it also must submit a plan showing how it will get back into the black, said Matt Cardoza, Georgia Department of Education spokesman.
"That plan can encompass a variety of things, whether that’s raising the (tax rate) or decreasing spending," he said.
A monthly spending plan can’t go on indefinitely, though. School systems must submit their annual budget by Sept. 30, Cardoza said.
The Gainesville school system is looking at raising taxes and cutting expenses in its efforts to deal with its deficit. Chief Financial Officer Janet Allison said Monday that the deficit could end up being as low as $5.5 million by June 30, or the end of fiscal 2007-08.
The City Board of Education voted Monday night to approve a $53.24 million tentative budget for next fiscal year, which starts July 1.
The proposed budget includes what school system Superintendent Steven Ballowe termed an "exploratory" total property tax rate of 7.96 mills.
That includes 7.62 mills for maintenance of operation and .34 mills for paying off old bond debts.
One mill equals $1 for each $1,000 in assessed property value.
The current overall rate is 6.96 mills, or 6.62 mills for maintenance of operation and .34 mills for bond debts. The tax increase would be 14.4 percent.
The state requires districts that expect they’ll operate in a deficit as part of a new budget year to raise their tax rate by at least .40 mills, Allison said.
The Gainesville school board is set to approve a final 2008-09 budget June 30, and Allison said she expects to use every possible minute putting together a suggested spending plan.
Allison is working with school officials to see how the district can further cut the $53.24 million budget, using suggestions from school board members and school administrators.
"Even after the budget is adopted, we can continue to look at cuts," she said.
Cardoza said the state can work with the system.
"Our job is to help them get out of (the deficit)," he said. "It’s not to penalize them and certainly not to penalize students if something is for the good of kids."
The state also realizes that for some systems, digging out of a financial hole "isn’t an overnight process."
"Sometimes that takes a couple of years for systems to get out of," Cardoza said.
The school system has considered, as a maximum tax hike, an overall rate of 8.34 mills. Allison has said that at that rate and based on certain economic conditions — how much midyear money the system gets from the state and the tax collection rate — the system could go into the black possibly in two years.
The system’s fiscal nightmare has stirred the anger of residents, with many pressuring the school board to fire Ballowe.
A large red elephant model spotted at Jack Waldrip Real Estate at 200 W. Academy St. bears a sign that reads "Fire Ballowe or dissolve city system."
State Rep. Carl Rogers, R-Gainesville, told board members Monday night that if they could not take corrective action, he would introduce legislation to dissolve the school system.