Cobb County School Board faces huge deficit for 2014
by Lindsay Field
January 17, 2013 12:15 AM | 9363 views | 37 37 comments | 7 7 recommendations | email to a friend | print
Dr. Michael Hinojosa (MDJStaff/Laura Moon)
Dr. Michael Hinojosa (MDJStaff/Laura Moon)
slideshow
MARIETTA — While Cobb County School Board members learned Wednesday that the district received high marks once again on its annual budget, they also found out that early data is showing a big deficit ahead for fiscal year 2014.

Half of the board’s four-hour meeting was spent diving into what next year’s annual budget holds. The board also heard from Adam Fraley with Mauldin & Jenkins of Atlanta on how Cobb Schools managed its finances in FY13.

Early projections, which Chief Financial Officer Brad Johnson said were “guesstimates,” show that for FY14 Cobb could be looking at $807.6 million in revenue, $887.1 million in expenditures and a $79 million deficit.

“We have a lot of assumptions that we used,” Johnson said about putting the report together.

Cobb Superintendent Michael Hinojosa said the district is not ready to release any solutions to eliminating the deficit and said those could be presented to the board sometime in late March following adjournment of Georgia’s 2013 legislative session.

“By then, we should know what the final number will be,” he said Tuesday.

Approximately 70 percent of the total annual budget is spent on instructional employees and 90 percent on all staff members.

Additional expenditures for FY14 include the annual step increase of $9.9 million; increasing the Teacher Retirement System rate from 11.41 percent to 12.28 percent, or $4.4 million; increasing health insurance for classified employees, $5.4 million; utility increases, $1.6 million; and charter school payments, $2.2 million.

Johnson said there are still a lot of “unknowns” regarding the budget. For example, estimating the car tag tax changes, austerity cuts taken by the state and whether an extension for Medicaid funding, or the so-called “bed tax,” will pass.

Hinojosa said that if the bed tax failed, it could result in the district losing another $20 million in funding from the state.

He also reminded the board that the budget overview is the beginning of a potential six-month process and that in February, Johnson’s staff will bring a budget calendar before them to approve.

The FY14 budget must be approved no later than June 30.

During the meeting, Southeast Cobb’s Tim Stultz commented about the trend of a steadily increasing deficit through FY17. Projections indicate that Cobb could be looking at a $105 million deficit by then.

“Year in and year out, we continue to try to come up with a balanced budget, but we end up with furlough days, cutting the school year and looking at these numbers, it appears this is going to be the same model moving forward,” Stultz said. “I don’t think that’s a good way of running the school district.”

He referenced Hinojosa previously, saying that the district will not be able to continue financially surviving on the current “model of education,” and that they have to find a more efficient ways to educate young people.

“You’re exactly dead on Mr. Stultz,” Hinojosa responded. “This year we intend in this budget reduction plan to start laying out some different ideas.”

Hinojosa said the changes would have to be presented at a later time.

In other business, Johnson announced that the district received a “clean opinion” from auditors on the Comprehensive Annual Financial Report.

This means that the financial statements of the district are considered to present “fairly” the financial position and results of operations for the year ending June 30, 2012.

Johnson said only a handful of districts in Cobb prepare CAFRs and that 2012 marked the 31st consecutive year they had been recognized for “excellence” in financial reporting.

“We are proud to continue this tradition,” he said.

Fraley applauded the district for “valuing” its Fund Balance by keeping it as replenished as possible. It currently sits at around $98 million, which would allow the district to run for a little over a month if the General Fund were zeroed out.

“Cobb Schools is in a good financial position,” he said.

The budget forecast will be posted online at www.cobbk12.org.
Comments
(37)
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schoolforillegals
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January 19, 2013
How much money is going to teach and feed all the illegals in our Cobb County schools? What is that dollar amount? They are sucking our resources dry, and taking away funding and teaching time for the students who are legal citizens. Why can't Rich Pellegrino, Jerry Gonzalez and Kevin Foley open their own separate school for them since they love them so much?
Supreme court
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January 19, 2013
How many times do I have to tell you rednecks? In 1982 the supreme court ruled that public schools have to teach illegal aliens. A Texas statute denying free public education to illegal immigrants violated the Equal Protection Clause of the Fourteenth Amendment, because discrimination on the basis of illegal immigration status did not further a substantial state interest. Fifth Circuit Court of Appeals affirmed. End of story. For the love of god find a new cause. Pay teachers more or enforce the immigration laws we have but the idea that we can save money by not teaching illegals? STUPID.
Knee-jerk reactions
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January 18, 2013
Just to illustrate, that although it sounds like a big cost saving idea, cutting the central office staff would only make a small reduction to overall costs. From the 2012 budget:

GENERAL ADMINISTRATION - with 30.75 positions - activities concerned with establishing and administering policy for operating the district - including activities of the BOE, local activities in interpretation of the laws and statutes and general liablility are charged here, as are the activities of external auditors, activities performed by superintendent, administrative support personnel and deputy, associate or assistant superintendent having overall admin. responsibility. Total cost - $6,214,299.00. (0.73% of budget)

CENTRAL SUPPORT SERVICES - with 108 positions - Central office activities other than general administration and business services. Included are personnel services, data processing services, strategic planning including research, development and evaluation on a system-wide basis; and public relations activities, suchas writing, editing and other preparation necessary to disseminate information to students, staff and the general public. Total Cost $14,554,596.00 (1.71% of budget)

SUPPORT SERVICES - BUSINESS - with 49.70 positions - Activities concerned with the fiscal operation of the district, including budgeting, financial and property accounting, payroll, inventory control, internal auditing and managing funds. Also included are purchasing, warehouse and distribution operations, and printing, publishing and duplicating operations. Total Cost - $5,845,916.00 (0.69% of budget)

Bottom line, we have to come up with alternatives for increased revenue from a number of different sources. Which may include upping the millage rate, offering early retirement for those on the higher pay scales, etc. It needs to implemented in such a way that it does not impact too heavily in one area, but is spread out. Short of firing a lot of teachers and consolidating into huge classes, somebody better come up with something reasonably soon.
Just Sayin'....
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January 19, 2013
Thank you for that Jay. However, per the budget presented to the board this week, 20% of the total is what we need to focus on this time around....i.e. non classroom positions. Either you are misrepresenting the numbers or the budget director is. Which is it?
Pay Up Seniors
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January 21, 2013
Upping the millage rate is NOT an option for the taxpayers of Cobb County. Let's get our Seniors in Cobb County to pay their fair share.
Mike O. Bedenbaugh
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January 17, 2013
Now if GLOVER STREET comment is correct using the math that comes to 18 plus students per teacher in a classroom NOT 35 to 40 as spoke about last year and the special ed students come to 10 plus students per teacher. Now if these numbers are correct that means we should have very much one on one attention to educate the children since 25 to 30 students per classroom teacher is average size. Somebody needs to see what fox or rat is in the checken coop and get the numbers correct; like a MATH TEACHER or fourth grade student.
Bad decisions
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January 17, 2013
This board refuses to take suggestions from anyone. The people who are on the front lines should get paid the most. Close all schools from last week in June through third week in August. Cut vacation payouts. Cut area superintendents, special education budget, all the dept. heads at the county office, and all the secretaries of executive secretaries. Flood your board members with emails demanding these cuts. The only people who are important are teachers, payroll, and benefits. The rest can go and no one would notice. The board refuses to get serious and treat the teachers and students like they don't matter. I have news for CCSD-if you got rid of most of central office, no one would notice and it would have no affect on student test scores!
Central Office
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January 18, 2013
I work in Accounts Payable. If we weren't here to pay the bills the schools wouldn't be up and running. We at Central Office are more important than what we are given credit for. I feel our job here in AP is very important and a necessity.
Bottom Line
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January 17, 2013
We have known for some time that other strategies will need to be implemented at some point to achieve a financially viable budget. Certainly something besides just cutting staff and using fiscal smoke and mirrors to make it through another year. The state has proven that we cannot depend on it as a reliable, consistent source of revenue, even though I bet Cobb contributes more revenues per capita than most other districts and yet gets less back. At some point some type of tax increase or other revenue stream will need to be considered. Hopefully not on the backs of retired, low income homeowners who are already at risk.

Last years budget included $25,202,632.00 for a staff of 77 who work in "Instructional Staff Services". Their description - "These activities include curriculum development, techniques of instruction, child development and understanding, staff training and professional development." No mention of how their salaries break down compared to other costs, but at $327,307.00 per staff member, you wonder how much some of those ancillary costs are and how necessary. Large speaking fees for the latest educational specialist passing through, testing, yet another curriculum change etc. are probably a big part of it. These are probably the same people that are currently having our teachers do "assessments" on practice tests that are not only very time consuming because of written portions and the way they have to be graded, but also don't cover the actual current curriculum. Teachers are also concerned all the curriculum changes and mismanagement will further negatively impact their supposed job assessments based on tests in the near future. Being held accountable for a student's proficiency on material not in the curriculum yet or may be changed to at the last minute, is not what I would consider supporting our educators and students. Allowing these middle management specialists to bury our teachers in bureaucratic minutae is further adding to an already stressful classroom environment. Sounds like a good place to start looking for savings.
Just Sayin....
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January 17, 2013
Some of you are going to hate me for saying this, but a recently replaced school board member shared these views. Love her or hate her, Ms. Bartlett was right on the money when she protested the use of the "extra" 30 million dollars they found late last spring. That sure would have comein handy now.

Time to form a citizens group to deal with the school issue. Anyone else think so?
@Just Sayin
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January 20, 2013
You're speaking of the same Bartlett who used "found funds" to support restoring one furlough day for the current school year.

Was she against it before she was for it?
Used to work there
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January 17, 2013
MDJ check the salaries of central office employees, many of them make over $100,000. How many departments with a supervisor are really absolutely necessary and essential? Consider consolidating some departments instead of increasing class sizes or firing teachers.
Glover Street
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January 17, 2013
Just to keep everyone informed, the Glover Street administrators who received raises were the 6 people on Hinojosa's Executive Team (Chief HR, Chief Academic, Deputy of Instruction, Deputy of Operations, and Chief Financial Officers). Has anyone looked at the Special Education Budget? Here is a question for the Board to ask - When student data is reported to the State for funding, how much does the district actually earn for Special Education teachers and how much does it have to pay for out of local funds? From the district's web pates, there are 5588 teachers in the district for 106,000 students and another 1464 Special Ed teachers for 15,000 special ed students. You do the math? Plus the Central Office has a Special Ed Assistant Superintendent, 3 Directors, 3 Assistant Directors, 18 Supervisors, 25 Program Specialists, and 15 secretaries just for Special Education. I say some of this can be cut???
Dr. Teresa
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January 18, 2013
Let's get the Blame Game straight. The curriculum changes and teacher evaluation changes are coming from the STATE Super and STATE BOE, not the local BOE, with no extra funding for implementation. Special education is driven by Special Ed law (IDEA) that has always been an unfunded mandate. Changes in IDEA and NCLB required that the number of spec. ed. teachers be almost DOUBLED in 2006. These FEDERAL laws required more work and positions, but no extra money. The Spec. Ed. central office employees are there due to the fact that 30 plus pages of paperwork are required for each special ed student and for the meetings, meetings, and more meetings with parents who are justifiable concerned that their children's services are being diluted with the Fed's required all inclusion model.The CCSD must also fund attorney's fees for the ever present Spec. Ed lawsuits and other legal actions because Spec Ed Hearing Officers are constantly giving in to parents requests for their child to be educated one-on-one in the home and other such demands. Staff development is needed to continually train teachers on new FEDERAL and STATE laws and requirements. There is enough blame to spread around so help solve the problem by addressing concerns appropriately to the right government agency. Also, Cobb's central office staff is LEANER and paid less with better academic results than all other metro Atl counties and other counties of similar size all across the country. Find a way to be part of the solution rather than part of the problem.
Be Careful
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January 17, 2013
Businesses all across this great country face this situation every day. That the school board has been unable to get a handle on this in the last few years speaks volumes about their inability and inexperience in dealing with large budget situations. Maybe it's time the county commission disband the elected board and appoint a board of experienced business executives who know what they're doing.
ProJour
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January 17, 2013
You realize the county commission has nothing what so ever to do with the board of eductation, right? They are 2 separate, independently elected bodies. Like so many here, you spout off with absolutely no clue what the heck your're talking about.
Be Careful
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January 18, 2013
Dear "Pro Jour",

I know the school board is not connected with the county commission. My suggestion was the county commission step in and help fix this mess.

I know exactly what I'm talking about. You didn't understand my original post. And you didn't have to be so rude about it.
ProJour
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January 19, 2013
Sorry if you found that rude, but unfortunately while you say you know what you're talking about, you continue to demonstrate by your statements that you do not.. The county commission has no authority or capability to "step in," therefore your suggestion is invalid on the face of it.
another comment
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January 21, 2013
@ Be Careful: Do you realize that the county Commission is ALSO an elected body? This is the same group, led by Tim Lee who has raised taxes 6 times in his short tenure as a chair?
Closed for Summer
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January 17, 2013
Here's an idea: close the entire school district, including the central office and all the schools, for a full 4 weeks in the summer. And, since they'll now have a full month off, reduce all the annual employee contracts from 240 days to 220 days while also eliminating future vacation accrual. We'll save a month's worth of utility bills, we will reduce our annual employee costs by 8.3%, and we will stop accumulating unused vacation payout liabilities. It'll save millions without any negative effect on students, instruction, or class size.
And How
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January 17, 2013
How would the schools be cleaned and repaired from all the damage the students have done through the year? Would the parents need to volunteer to make that happen?
West Cobb
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January 17, 2013
Most major corporations are doing away with vacation payouts as a huge cost-saving measure in this very economically challenging time. Use it or lose it. And I agree 100 percent - what exactly are the central office employees doing during the summer? Didn't they do only a 4-day workweek last year - was there a reduction in salary at the same time?
Kennesaw Resident
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January 18, 2013
@ And How, perhaps the parents should volunteer, if their student is the one cuasing the damage.
@West Cobb
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January 18, 2013
It was a four day work week working 10 hours a day.
Glover St. RIF
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January 17, 2013
MDJ, how about an article detailing the total cost of the central office, along with a listing of how many employees there are in each division, what they really do, and how much the supervisors make? Anyone want to guess how many central office folks make more than $80,000 a year?
"Efficient Ways?"
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January 17, 2013
When Hinojosa say's "more efficient ways of educating young people", he really means ways to use technology to replace teachers, i.e., how can we get away with fewer teachers per student through technology. The factory model strikes again!
BabySitta
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January 18, 2013
When the "flipped" model is complete CCSD will have one teacher with a webcam teaching 400 students. Heck, we can record the webcast and we won't even need the original 1 teacher! Students can sit home at their computers, parents can fee them a "free lunch" and monitor their behavior...Oh wait, that's where it all goes to H3LL. When parents realize that the tech push is putting their darlings back in their homes for them to be responsible you'll see a sudden movement to pony up the money in taxes to balance this budget. When civilized folk get sick of their homes being burglarized and vandalized by thugs who were supposed to be at home reviewing their "flipped" lesson from their CCSD virtual teacher but instead chose to destroy society they will quickly agree to the tax increases needed to balance this budget. Wait and see. Glad I'm a police officer. This CCSD virtual teaching plan sounds like job security for me!!
Senior Exemption?
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January 17, 2013
Cutting the central office is certainly needed. For example, who's going to miss the 100 people "working" in Curriculum and Instruction? But, we also need to fundamentally change local funding. While money from the state is INCREASING by 4.1%, local tax revenues are DECLINING by 6.4%. It's time for to repeal, or at least reduce, the senior citizen homestead exemption in Cobb, at least until home prices fully recover.
santagirl7
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January 17, 2013
hold on there about the senior reduction..... I have just hit the age to apply for it and feel i have "earned" it, I have watched this & previous school boards mis-manage $$$ so why punish us seniors for their errors? we have paid our dues, leave us out of this
Kennesaw Resident
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January 17, 2013
It is past time to repeal the senior exemption. Perhaps our new school board members will ask our legislators to dp the right thing for our young people in Cobb County!
To santagirl
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January 17, 2013
Cobb County is the only county with a total exemption. That is fine if we have the money, but we don't and it is not a right but a perk. You either want to live in an area with good school which attract good people or a declining district which lowers home values and leads to the declining population.
irked
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January 18, 2013
On one hand, you have the senior exemption that is causing havoc with the school board budget.

On the other hand, you have the BOC building all kinds of publicly funded retirement communities to attract those that will take advantage of the senior exemption.

Go figure.
Think About This
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February 05, 2013
(1) We all benefit from an educated society. Seniors at one point were school children and educated because of property taxes. It is almost like they are saying, "Thanks, I got mine and now I'm not going to help you get yours."

(2) CCSD is in a budget crisis and so are teachers. Gas prices up, bills up, cost of living up, pay check down.... CCSD #2 in education in GA and #23 in pay in GA. Something is wrong with that picture.

(3) With all of the cuts, we must strategically plan on how to remain attractive compensation wise to get the best and brightest and yet provide the high quality education Cobb residents expect.
Just Sayin'....
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January 17, 2013
Do the math. If 70% of the expense is instructional employees, and 90% of the expense is all employees, that means 20% of the total are non-instructional employees....the largest portion of which is district staff on Glover Street. I am sorry guys, but it is now time to reduce the expenses at HQ. While we have sliced teacher salaries we have actually given raises to the administrators. THIS must stop.

The other thing no one is mentioning is the lack of a SPLOST to take money out of, so we have finally hit the point of running out of money. Hmmm....even a casual observer saw this coming. Without taking a cheap shot at the two previous board chairs for kicking this can down the road, it is now time to get serious.
CobbTeacher
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January 17, 2013
I agree with ya Just Sayin' 100%. Reduce Glover Street and stop giving yourself and your comrads raises. Teachers are the ones in the trenches and ergo, deserve the raise - not the administration.

You know what they say - "Those that can, teach... those that can't work on Glover Street."
KSU MBA
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January 17, 2013
The first thing a business would do is reduce overhead and non-essential employees - how about it school board?
truth hurts
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January 18, 2013
Correction to Just Sayin' - Non-instructional employees include bus drivers, food service workers, custodians, building maintenance and grounds personnel and technology services department. This group is significantly larger than Cobb's small staff on Glover Street.
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