Pike Co. Schools forced to borrow money

Published 12:00 am Wednesday, July 11, 2001

Staff Writer

A recent ruling by the Alabama Supreme Court could force school systems like Pike County’s to turn to financial institutions for assistance.

The Pike County Board of Education, at a special-called meeting in January, authorized a line of credit with local banks for up to $900,000 per month as needed to meet payroll and pay bills and accounts. That decision was made even before the battle in court began.

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Overall, the county school system will experience $800,000 in cuts from the 4.13 percent proration, said Pike County Schools Superintendent John Key.

Add another $163,324 hit to transportation funds and it’s the equivalent of $1 million, Key said, explaining $13,566 for fleet renewal was taken away after the school system had already borrowed the money.

Hank Jones, superintendent of the Troy City Schools, admits the 3.80 percent won’t hurt the three-school system as much as the 4.13 percent cuts to Pike County schools.

"We’re not going to be as negatively impacted as the Pike County School System," Jones said. "But, we are going to have to cut some programs."

Jones said he is working with others in the schools system to make cuts without "severely impacting the students."

Cuts in the other current expense money will likely be one of the biggest impacts on the school system, Jones said of the money used to offset increases in utilities, which he doesn’t see decreasing anytime soon.

"OCE will impact us forever," Jones said of the estimated $200,000 to $300,000 loss in other current expenses.

Because of the severe cuts to the Pike County Schools, Key said, the system will have to borrow money in order to pay salaries and bills.

Borrowing the money is the only option, Key said.

"In my opinion, there is no way to cut that much," Key said of what would have to be cut.

Already, about 50 of the state’s 128 school systems are doing the same.

Justices recently ruled state education budget cuts should be shared equally by K-12 and higher education. That decision killed the governor’s attempt to put more of the burden on higher education after he declared a 6.2 percent across-the-board proration of the Education Trust Fund.

Gov. Don Siegelman fought to protect K-12 and urged passage of the School Funding Act as "a safety net." Since the court’s ruling, he has ordered the state finance director to sell the bonds authorized by that act.

Sandra Simms-deGraffenried, executive director of the Alabama Association of School Boards, said the Supreme Court ruling is "devastating for the 740,000 public schoolchildren of our state."

For months, she pointed out, officials from the state’s colleges and universities have talked about tuition hikes and other things that will hurt their efforts to educate students.


"However, those problems pale in comparison to the blow our K-12 public schools will take … Unlike the colleges, public schools cannot offset proration by raising tuition, foregoing raises for staff or charging higher mandatory fees for their programs. K-12 schools do not have the ability to make up such losses. Instead, we can only appeal to the mercy of our local city councils and county commissions to make up the budgetary shortfalls."

According to deGraffenried, the Education Trust Fund proration of 6.2 percent "will be slashed to almost 16 percent" since three quarters of the fiscal year have passed.

"We expect this to be a severe blow to most school boards," deGraffenried said. Very few boards have the financial reserves to weather that kind of devastation."

Although those looking out for the best interest of K-12 are disappointed, officials at the state’s colleges and universities are pleased with the Supreme Court’s decision.

Gordon Stone, executive director of the Higher Education Partnership, said the ruling "establishes the fact that all students in the state, whether in K-12 or higher education, must be treated fairly and equitably. The court sends a message that higher education and K-12 are both essential components of public education."

He also said the decision treats college students, faculty and staff as equals of students and teachers in K-12.

After the court’s decision was announced, Stone said this year’s financial situation should send a message "that all components of public education in Alabama should work together to find new sources of revenue."