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Trinity Standard - Local News
Stories Added - July 2010
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TISD eyes cuts in wake of state deficit

Trinity Standard -

TRINITY – With reports of state deficits and possible delays in state education spending filtering in from Austin, local school officials are being warned to brace for spending cuts and tough financial times over the next several years. During the Trinity Independent School District’s first 2010-11 budget workshop Monday night, Business Manager Kevin Parish warned school board members that the district could face more than a $280,000 drop in state funding during the coming year. Told to expect cuts in personnel and other expenses, board member L.C. Courtney summed up the situation by saying, “The big picture is that we’re in a world of hurt and we better be prepared to deal with it.” In his report, Parish noted state officials are currently struggling with what is now estimated to be a $17-to-20 billion budget deficit. This means information coming out of Austin about next year’s state education spending has been delayed and the news that is trickling out has been bleak. Parish said the Texas Education Agency (TEA) already plans to pay local districts part of their current year’s money out of the state’s 2010-11 allotment. “We have been told that we can expect a delay in our August payment from the state,” he told the board. “We will get the money, but it probably won’t arrive until September after the new budget year begins.” He told the board the August payment was scheduled to be $838,232 and that the district would have to use its “fund balance” or reserve funds to cover expenses until the state money does arrive. Parish warned that while the official notice has not been issued, information being presented to school business officials at state workshops indicates next year the state may halt their monthly payments to schools as early as May. “That would mean we would have to cover the entire summer out of our fund balance,” he said. He noted the summer payments from TEA next year would be about $2.1 million, which if delayed, would mean the local fund balance would have to take up the slack until the state money began flowing again. And what is worse, Parish said it is not known if the state will be able to repay the district the entire $2.1 million once funding resumes. He said that the current consensus among state school finance officials is that the money will only be delayed, but Parish warned the state could decide to “prorate” the payments across the board. “That means that if the state decides it does not have enough money to pay all of its FSP (Foundation School Program), they may reduce the amount by a certain percentage across the board. “For instance, if they decided to reduce the FSP by 20 percent, for every $1 million they allocated, you would only get $800,000 and they won’t settle up at the end of the year. The school districts are just out that money.” Parish said the district currently has about $2.7 million in its fund balance and would be able to survive if the state does decide to significantly delay its payments next year. He added that if the state decides to prorate its FSP allotments, the district also could survive but it could cripple the district’s financial reserves. The business manager noted the district tax rate is at the maximum allowed so increasing local revenue it not an option. He noted that while assessed values being set by the Trinity County Appraisal District also are increasing by about 10 percent this year, schools cannot expect additional revenue from the change. “It is a common misconception by the public that schools receive additional money as property values go up,” he said, adding that while local tax money does increase, the state reduces its contribution to schools to offset those gains. “The only real way we have to increase revenue is through an increase in the number of students and that is not happening,” Parrish said. “Over the past five years we have been fairly stable in terms of numbers of students.” The FSP provided to local school districts is based on each district’s Average Daily Attendance (ADA). As the ADA goes up, the state increases its allotment to that district. When it falls, the state funds also drop. Because the district cannot increase its own revenue and the state money is expected to decrease, Parrish said the only option the school district has is to cut spending. Because 73 percent of the school district’s budget covers salaries, Parrish warned that most of the cuts would have to come in personnel. Additional budget workshops will be held be the board prior to their regular meetings on both July 26 and Aug. 23 starting at 5 p.m. More workshops also may be scheduled as more information is provided by TEA.


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