Proration increases by two percent
Local school systems will face even more financial hardships after Alabama Gov. Bob Riley emptied the rest of the Rainy Day Fund and increased proration by 2 percent.
Riley already declared 9 percent proration in December, but after significant drops in sales tax revenues that number would not suffice to make it through the rest of the budget year, which ends Sept. 30.
This cutback will mean the state has spent $5.7 billion on education this year, down around $1 billion from last year’s $6.7 billion spent.
For Troy City Schools this will mean an additional $250,000 to $300,000 will be drawn from its reserve.
“We will have to pull that from our reserve in addition to all of the adjustments we have made already,” said Troy City Schools Superintendent Linda Felton-Smith.
For the year, this will mean the city schools will have to come up with around $1.5 million to make up for state cuts.
While the school system has the money in reserve now, it is something Felton-Smith said is concerning.
“The fact that we do have a reserve means Troy City Schools can handle this expense this year,” Felton-Smith said. “However, we have to be very conscientious of our expenditures because if you continue to go into the reserve and are not able to put back into it because of sales tax revenues going down, that means you do not have that protection.”
At the university level, the hit will not come as hard.
Troy University’s Senior Vice Chancellor of Finance Jim Bookout said the school is in OK shape since it has already reduced its operating budget this year.
“We’re in good shape because we’ve reduced our non-salary budget by $9 million,” Bookout said.
Superintendent of Pike County Schools Mark Bazzell could not be reached for comment before press time.
But both Felton-Smith and Troy University’s Director of Government Relations Marcus Paramore said the cuts did not come as a big surprise.
“We were somewhat expecting it, but we were hoping we could get through the year without proration,” Paramore said.
Cuts this late in the budget year will hit K-12 school systems harder than the university, since there is no way to reduce costs at this time.
“It means more dollars coming out of the end of the fiscal year,” Felton-Smith said. “Instead of being spread out over nine months, it’s spread out over two.”
Paramore said the university will have to eat the costs just the same, but is prepared to do so.
“If you’ve only got a couple months, you can’t make extra cuts,” Paramore said. “Fortunately, we have built ourselves a budget that is conservative.”