Board of Education discussion described as “pretty depressing”

The Beaufort County Board of Education on Tuesday began what one member described as a “pretty depressing” discussion of its proposed 2011-2012 budget for county’s school system.

Board members told Beaufort County Schools Superintendent Don Phipps to come back to them with specific recommendations on possible cuts in the face of rising costs and possible cutbacks from all three of the major sources of school funds.

Phipps told the board that it’s particularly difficult to prepare a budget this year because of recent changes in the leadership in the state Legislature.

The state’s Republican-controlled Legislature and its Democratic governor have staked out different positions on school funding. As a result, Phipps said, it’s harder to know what the future holds.

“Something changes every day,” he said. “And things will most likely change in the coming weeks and months.”

Phipps presented an overview of the effects of Gov. Beverly Perdue’s $19.9 billion spending plan on Beaufort County’s public-school budget.

While Perdue’s plan seeks to preserve teaching positions, it shifts to the counties the burden of funding several parts of public education that were previously funded by the state č including costs for worker’s compensation and some liability insurance and the costs of replacing school buses.

“I don’t know how to make up those cuts without touching personnel,” Phipps told the board.

Perdue’s budget also takes away from counties two important sources of funds that have been used to fund new school construction.

It would use the counties’ share of state lottery funds to pay for state education expenses and eliminate the counties’ share of corporate-tax proceeds for construction of school buildings.

In 2010-2011, about $39.6 million, or about 57 percent, of the Beaufort County Schools budget came from state funds; about $15.8 million, or about 23 percent, from county funds and about $13 million, or about 19 percent from federal funds. The remaining 1 percent of the budget came from the local school system’s fund balance.

For the 2011-2012 school year, Phipps predicted a budget shortfall of about $1.4 million, based on expected cuts in those funds.

He and other school leaders said that is probably the best-case scenario.

“If the governor’s budget is not passed, if the (state) Legislature does their on thing, it’s going to be worse,” said board Chairman Robert Belcher. “Don’t you think you’re looking at a ‘worser-case’ scenario if the Legislature does their own thing?”

Responded Phipps, “This budget is as good as it gets.”

Also undecided is the amount of funding the local public schools will receive from Beaufort County.

In 2011-2012, the school system faces the end of an agreement with the Beaufort County Board of Commissioners that guaranteed a consistent source of school funds in recent years.

To cover increases in fixed costs such as retirement and hospitalization insurance and to cover costs recommended by Perdue to be passed down to local school systems, the school system’s budget request to the county will increase by $497,171, according to one proposal presented to the board.

Belcher said he didn’t think the school system could count on that increase, and he asked Phipps to come back with suggested cuts to make up for the expected increase in expenses.

Beaufort County Schools has been tightening its belt and saving money for more than a year in anticipation of difficult times ahead.

In the past two years, the schools system cut 45 positions č including some 26 teaching positions and 14 teaching-assistant positions č through retirements and attrition. Class size has increased, and class offerings have been reduced, Phipps told the board.

Unlike those in many school systems, Beaufort County’s school leaders chose to bank $1.4 million in federal stimulus jobs funds that can be used in the coming year to help avoid staff cuts. School leaders have worked to preserve as much reserve fund balance as possible, anticipating even more difficult budget years ahead, he said.

Despite those preparations, school leaders predicted a difficult year ahead.

“It’s pretty depressing,” said board member Cindy Winstead.

Board member Terry Williams agreed.

“It’s going to be bad,” he said.╩

Meanwhile, Belcher said it’s time for the public to lobby the elected officials who control the fate of school funding to let those officials know the public supports the public schools.

Board members Barbara Boyd-Williams and Mike Isbell did not attend the meeting.

Estimated increases for 2011-2012

Beaufort County school leaders predict an increase of an estimated $497,171 in local expenses during the 2011-2012 school year as a result of the rise of fixed costs such as retirement contributions and hospitalization insurance and costs currently covered by state appropriations that Gov. Beverly Perdue recommended be passed down to local governments. This does not include the cost of replacing three school buses at a cost of $79,657 each, as recommended in Perdue’s budget.

Here’s a look at those predicted increased in expenses.

Energy increase of 5 percent: $152,768

Projected increase in retirement funding: $46,207

Projected increase in hospitalization insurance: $28,244

Projected increase in workers compensation insurance: $182,654

Projected increase in tort insurance for school buses: $73,500

Projected increase in charter-schools payments: $13,798