Wednesday, June 17, 2015
Budget Decisions Call For Establishing Priorities
T.R. Williams, Lawrence County Executive
With the Lawrence County School System’s proposed 2015-16 budget still incomplete, Commissioners will not be able to approve a county budget by June 30, as I had hoped.
School officials are dealing with a budget that includes two unknown factors: a final number for BEP (Basic Education Program) funding from the state department of Education, a figure that changes each year based on student enrollment; and a proposed teacher raise that has not yet come before Board members for a vote.
The school system’s current spending plan calls for approximately $1.25 million from its $3.5 million fund balance. That is deficit spending, something that’s a bad idea whether you’re running a household, business, or government. When you spend money from your savings to shore up your regular budget, you are likely forced to continue to do that, year after year.
The School System can only afford this level of spending one year. It is required by the state to keep a balance of $1.35 million - three percent of its $45 million budget – for salaries and emergencies. The proposed amount of deficit spending for the coming year would take the balance down to about $2.25 million, and the next budget year down to $1 million.
Commissioners, School Board members, Dr. Heath and I are scheduled to meet this Thursday at 5 p.m. in the Commission meeting room at the Lawrence County Courthouse. I expect this to take us closer to a final number and a budget the Commission can approve in mid-July.
Unfortunately, the School System’s budget is not the only one with a deficit. The County’s Budget Committee, which I chair, has been working to turn that around since other departments submitted their numbers in April. We have taken on the difficult task of looking at each budget, line by line, and no one got a rubber-stamped approval. We said no to many new requests, and managed to eliminate $998,130 in expenses.
Our first job was to differentiate between true operating expenses and capital projects, which include things like low water bridge construction, computer upgrades, remodeling projects and vehicle purchases. Lumping those one-time expenses together with basic, annual operating costs creates a false picture of exactly how much money it takes to run our county.
Property tax revenues, at the current rate of $2.74 per $100 of assessed value, are divided as such: Schools receive 36 percent; the Highway Department 10.2 percent; Debt Service 11.8 percent; and County General, 42 percent. County General is comprised of all other departmental budgets including the Sheriff’s Department, the Jail, the Archives, Maintenance, Accounts & Budgets, and General Sessions, Chancery and Juvenile Courts.
After the 2015-16 operational budget is approved, we will tackle capital projects, and consider each proposal separately to determine its merit. A new bond issue – a method used by local government to borrow money at a very low interest rate – will be needed to fund them. Money allocated to debt service covers payments on bond issuances.
This brings us to the question of new school buildings. Debt service, as I stated earlier, receives 11.8% of the property tax allocation. A portion of that, plus all of the $25 wheel tax revenue – about $900,000 annually – goes toward school building debt. That sum, even if we dedicate more property tax revenues to debt service in the 2015-16 budget, will not cover the costs of two new high schools.
We all face difficult decisions when it comes to budgeting and finding ways to make ends meet. It all comes down to priorities, and being able to maintain the current level of services.
