Superintendent Michael Hinojosa and three board members said Wednesday the state needs to contribute more to local school districts, while lawmakers say there is no more money to give.
Many Cobb residents say they don’t want to see their local property taxes raised and it is the responsibility for the local school board to budget wisely.
“It is the responsibility of our elected officials to live within their means,” said Judy Manning of Marietta, a former Cobb County teacher and state representative.
The Republican who represented west Cobb said it was not practical for the school board to rely on any more money from the state when the state is struggling to balance its budget as well.
“They have the amount of money the state has given them. … It’s their responsibility to make it work from that point forward,” Manning said.
Having nice schools and extra activities for students is beneficial to the students, but Manning thinks the board may have lost sight of what is absolutely necessary for teaching children such as paper, pencils and teachers.
“We would all love to have a blank check. It is not available for public education in the state of Georgia at this time,” she said.
David Chastain, a Libertarian from Acworth who has long warned about the school district’s spending habits, agreed that the school board has gotten into a habit of spending too much money in places it couldn’t afford, and the financial decisions of former school board members have added to this year’s budget woes.
For years, Chastain said, the school board has been mismanaging its money, spending more money on infrastructure than was needed and not supporting the students and teachers in classrooms.
“Our school board has been writing checks for years that our future school boards have not been able to cover,” Chastain said. “They always use this excuse ‘we don’t have enough money,’ but they have been entrusted with managing.”
Chastain said he has seen the school system grow by about 5,000 students in the last 10 years, but the amount of money the school board has devoted to building new schools and fields has far outpaced this relatively small growth.
When new structures get built, often using special-purpose sales tax dollars, they require more staff to maintain. That staff, in turn, must be paid out of the general fund, putting pressure on teaching positions.
“Teachers have lost their jobs because of the necessary commitments of general funds to support the infrastructure. We have lots of pretty buildings and lots of new technology, but are we able to keep the human capital we need in the classroom?” Chastain asked.
The Cobb County School District is anticipating a budget deficit of $79 million for the 2014-15 fiscal year, which begins July 1.
Brad Johnson, the district chief financial officer, believes the district will not get enough from state funding and property taxes in the coming year to balance what it needs to spend on educating its roughly 108,000 students.
The school district adopted a 2013-14 budget of $856 million, and is looking at a budget for the 2014-15 school year of $897 million, about a 5 percent increase from last year, according the district’s website.
Those monies don’t include the fourth 1 percent special purpose local option sales tax for education that voters approved in March. That 5-year SPLOST is expected to collect $773.3 million in taxes of which $717.8 million will go to the Cobb School District.
What the board says
Hinojosa and three school board members say the solution to the deficit should come from the state, which has steadily reduced its funding for the county for the past 10 years in response to a distraught economy.
At a meeting with parents at East Side Elementary School in east Cobb on Wednesday, Hinojosa and board members Scott Sweeney, Randy Scamihorn and David Banks encouraged parents to put pressure on Gov. Nathan Deal and lawmakers to give the school system more money next year.
“Governor Deal needs to feel uncomfortable,” Sweeney told parents. “He needs to think the people of Cobb County will not support him unless he writes in additional funding for education.”
With decreasing revenues from property taxes and decreasing state funds, the district’s two sources of revenue have both hit a ceiling, which have resulted in budget deficits, said Johnson.
No easy solution
The school district is in need of money, but there is not a simple solution for the source of needed funding, many say. Either raise taxes, or make drastic cuts.
“This is a mess. This is a total mess,” said J.D. Van Brink, the chairman of the Marietta-based Georgia Tea Party.
Brink says the district needs to get even smarter at where it is spending its limited dollars, because raising taxes is not going to solve its problems.
“There is no easy answer,” he said.
As property values rise, and the economy slowly heals, it will get easier for the district to balance its budget, Van Brink said, but there is no solution in sight that does not include major cuts in spending.
“As revenues continue to grow with our economy, education funding will remain the governor’s focus. We can only spend what we have,” said Brian Robinson, Deal’s spokesman.
State might not have the answer
Cobb County isn’t the only district hurting for money.
State Sen. Lindsey Tippins (R-west Cobb), chairman of the Senate Education Committee, said he was told on a recent listening tour that 25 to 30 of the state’s 180 school districts will be “financially insolvent” in the next 18 to 24 months.
“Educational funding is in trouble throughout the state of Georgia,” he said.
The economy just isn’t recovering at a rate fast enough to give school districts all the money they need, Tippins said. Education remains a priority at the Capitol, but there just isn’t enough money to go around, he said.
The state has cut spending in other areas in the last few years, Tippins said, citing the state’s parks that have been cut by about 20 percent and state patrol officers haven’t seen a raise in years. While school system funding looks bleak, Tippins advised parents to have perspective on the budget issues faced statewide.
Whether or not raising Cobb’s millage rate from 18.9 mills to the state maximum of 20 mills would solve some of the school’s budget woes, Tippins couldn’t say.
Each district across the state will have to decide whether or not raising taxes for an extra source of revenue is worth the burden on taxpayers in their district, Tippins said.
“They’ll have to weigh their revenue needs against the distaste of having to raise the millage rate,” he said. “It’s clearly a political decision they are going to have to make.”
According to information provided by Robinson, the state has spent more money on education each year since Deal began office in January 2011.
In 2011, the state spent nearly $7.07 billion on education, $7.08 billion in 2012 and $7.3 billion in 2013.
It is too soon to tell whether or not Cobb Schools can expect to see some money from the state this year to help close up its deficit, as Gov. Deal will release his annual budget to the Legislature during the second week of January, which will detail how much money schools will be getting in the coming year.
Closer look at budget
Last year, the district faced the same problem. At the end of June 2012, it faced a deficit of $79.5 million, and balanced it by using $45.2 million from the district’s reserve fund, approving five furlough days, which saved the district $15 million, Johnson said, as every furlough day equates to $3 million.
Both actions, Johnson said, were one-time solutions to a recurring problem, as there is not enough money in the reserve fund to tap into it again to fix this year’s deficit.
There was about $75 million, as of June 2013, left in the district’s reserve fund, but Johnson said he would like the fund to maintain at least enough money to fund the school district for a month, $71 million.
What does $79 million mean?
There is to be an expected gap between revenues and expenses of about $79 million, or about 10 percent of the school district’s budget this year, Johnson said.
Unless the state gives the district more money, the school board is going to have to make tough decisions on how to trim down the spending of the state’s second-largest school system.
“All of a sudden, our revenue stream has gone negative,” Johnson said.
The salaries and benefits of the district’s employees make up roughly 90 percent of the total budget, Johnson said, and those of the workers in the central office comprise about 3 percent of the budget.
“It really comes down to staffing, but we have already increased class sizes,” he said.
The average teacher salary in the county, including benefits, is $75,000, he said.
To close the nearly $80 million gap with teacher salaries, about 1,053 teachers would need to be cut.
Of the 13,526 people employed by the school district, 5,538 are classroom teachers, according to the district’s website.
At a savings of $3 million each, there would need to be about 26 furlough days instituted to fix the deficit next year if no staff cuts were made or any other sources of revenue gained.
“The deficit will stay until hard decisions are made,” Johnson said.