Pike County schools face deficit budget
Published 12:00 am Thursday, August 10, 2000
Pike County Schools Superintendent John Key has no choice but to submit a deficit budget to the State Department of Education, action that would normally result in takeover.
"I wish I had better news," Key said during the first public hearing on the FY 2002 budget held Thursday morning.
The bottom line of the budget being submitted to the state is a negative $261,000 that could end up at minus $361,000 if more cuts are made by the state.
"You can’t legally turn in a deficit budget except in a year of proration," Key said.
Under normal circumstances, the budget being submitted by the Pike County Schools would be "unsound financial practices" and result in state officials taking control of the school system.
But, under the circumstances of proration, Pike County is not alone and many school systems are being granted waivers.
Despite numerous cuts ­ including teachers and aides, an estimated $600,000 in maintenance and over $100,000 at the central office ­ over the past several years, the school system will have to turn to financial institutions in order to survive the upcoming school year and beyond.
The "most critical area" of need is transportation, Key said.
"Quite literally, we don’t have enough money to buy the diesel fuel or pay bus drivers, so we’re going to have to borrow."
Part of the problems stem from a continual decrease in student population, which has dropped by almost 1,000 in the past 10 to 15 years, Key said. That decrease translates into losses in funding from the state that is based on pupils.
Another hit has been a drop in sales tax receipts.
"The bottom line is we’ve been cut more than $500,000 in this year’s budget," Key said during the budget hearing.
And, there’s a possibility of another 1-percent hit in the near future.
Key said the only solution is creating ways that bring in more money, such as levying a 1-cent sales tax for education.
Local funding is approximately 15 to 19 percent of the total funding for schools and the last time Pike County Schools saw an increase in that money was in 1978. A temporary increase was made several years ago.
Pike County collects 9.7 mills plus the 1-cent sales tax Key calls the "lifeblood" of schools. Troy City Schools collect 10.7 mills plus sales tax.
But, sales tax money is being lost every day to Internet sales and catalog sales.
Getting the additional tax money is not just a matter of asking the county commission.
Because counties lack home rule, they can’t raise revenue without the Alabama Legislature’s approval.
"We are not a local school system anymore…essentially, we are dictated by the state," Key said.
Each school system must collect 10 mills of property tax or it doesn’t get its share of state monies.
"Essentially, its taken, by the state, off the top of local systems’ resources," Key said of that money.
One thing the school system will be pushing is renewal of the property tax which will likely be voted on in February, Key said, pointing out that will not be an additional tax for Pike County property owners.
Key had, at one time, approached Troy City Schools superintendent Hank Jones about an increase in the property tax, but the Troy Board of Education has stated it will not approve that kind of action.
Wyman Botts, a member of the Pike County Board of Education, is upset the Troy BOE won’t support the county school board’s efforts. He said their lack of support is a shame because Troy is in Pike County.
Since that idea has been abandoned, Key is focusing on a 1-cent sales tax increase.
"This will not solve our problems…but, it will give us some breathing room and take care of our deficit," Key said.
Botts said the county schools "desperately" need the property tax renewal and an increase in the sales tax or things are going to get worse.
He said the school system will eventually run into trouble recruiting teachers, have an impact on economic development and result in a lack of pride and motivation for those in the school system.
"I think the general public doesn’t see that," Botts said. "They don’t care."
Key said apathy is nothing new.
"We are not used to funding education like we should," Key said. "We’re not paying our fair share in Alabama."
According to Key, Alabama would have to quadruple its property tax in order to be at the national average. Doubling it would only put the state even with the next lowest state, which is Mississippi.
The second budget hearing will be at 5:30 p.m., Aug. 13 during the BOE’s regular meeting.