 By Neil Pedersen
The 2007-08 operating budget is the fifteenth budget that I have prepared, and promises to be the most challenging of all. There are no surprises or expenditures that we did not anticipate. Our fund balance is healthy. The proposed increase in our budget is not out of line with budgets in the past. What is different this year is that the county commissioners have given direction to their new county manager, Laura Blackmon, to prepare a budget that will not require a tax increase to support the operating budgets of the county and two school systems. They are taking this position after increasing the county property taxes significantly the past two years and in response to citizens who attended public hearings last year asking for tax relief. They also understand that property taxes will need to be increased by approximately 3.5 cents next year just to service the growing debt incurred from capital projects for the county and schools. Furthermore, this scenario will likely play out again next year when debt service peaks; therefore, this financial crunch cannot be viewed as a one-time event that will go away.
If neither the county property tax nor the special district tax rate is increased (except for debt service), we estimate that our total local revenues will increase by approximately $1.4 million. The school board’s budget request calls for $7.3 million in additional expenditures. It was pared down from an initial list of requests that totaled almost $10 million. Approximately $5.3 million of this additional funding is required to provide just for state-determined salary increases, the opening of Carrboro High School, preparation for the opening of our tenth elementary school, rate increases such as for utilities and continuation of current levels of service.
Consequently, if the commissioners’ position doesn’t change, we will be faced with a shortfall of approximately $4 million just to maintain our current operations, open new schools and provide for salary increases legislated by the General Assembly. We will need a total of $6 million above anticipated revenues to fund our entire budget request.
In meeting after meeting this spring, the county manager and commissioners have reiterated their goal of not raising the property tax to fund operations. Consequently, we have conducted administrative reviews to determine how we could cope without most of our new budget requests and how we could reduce our current level of expenditures to pay for next year’s new financial requirements. Recently, we expanded this effort to include a 28-person committee that includes representation from administrative, certified and classified staff as well as the board of education, SGC chairs and the Chamber of Commerce. At its first meeting, the committee brainstormed potential reductions, cost-saving measures and revenue-enhancement strategies. At our next meeting on Tuesday, May 15, we will refine these strategies.
To make reductions of the magnitude that could be required would significantly reduce the quality of education in our schools and negatively impact working conditions and staff morale. We project that we can reduce approximately $1 million from our budget by instituting austerity measures that would not cut too deeply into programs and services. After that, we are faced with the prospect of making significant reductions in educational programs, requiring fewer staff members to do essentially the same amount of work or adjusting the local supplement schedule to save on salaries. None of these repercussions is acceptable to us.
There are two purposes for going through this process. First, it is critical that all parties — the county manager, county commissioners, staff, parents, students and others — fully understand the consequences of a budget premised on holding the line on taxes. We would hope that decision-makers would see that these consequences are unacceptable to a community that prides itself on the quality of its schools. Secondly, we must be prepared to respond immediately to a serious shortfall in funding. Our fiscal year begins approximately one week after we learn of our appropriation from the county. We already are delaying the filling of many certified and classified positions. Nevertheless, we face the distinct possibility of instituting a reduction in force this summer, which would mean that staff members who already have contracts could be terminated. Yes; this is that serious.
We intend to provide you with details of possible budget reduction measures later this week and will be prepared to discuss them the following week at two meetings that have been scheduled for this purpose. Both meetings are in the Smith Middle School auditorium. The meeting on Monday, May 21, is for staff members only and begins at 4 p.m. and ends at 5:30 p.m. The second meeting is on the following day, May 22, from 7–9 p.m. It is intended primarily for parents and other community members, but is open to staff who cannot attend the Monday meeting. The purpose of these meetings is to provide information and clarification to these constituencies about the budget picture and the process that our request will follow until the county commissioners make an appropriation.
The time to advocate for items in our current or requested budget is at the public hearings that the county commissioners will hold. The first is in Hillsborough on May 31 in the Battle Courtroom. The second is scheduled for June 4 in the Southern Human Services Center on Homestead Road (behind the new seniors center). Both public hearings begin at 7:30 p.m. We have offered the use of Chapel Hill High School’s auditorium for the June 4 meeting and will let you know if the offer is accepted. You also may choose to write or telephone decision-makers or to communicate through the media. On June 5 the board chair and I will present our budget request to the county commissioners. By the end of June, the commissioners will decide upon an appropriation to the two school districts and will set the county and special school district tax rates.
I can assure you that my administration will do all within its power to secure the funds that we need to maintain the excellence that all of us have come to expect and to use the appropriation we receive as wisely as possible. We will be as sensitive as we can to all parties impacted by budget reductions and will make a concerted effort to maintain a positive atmosphere in our schools even when times are difficult.
Neil Pedersen is superintendent of the Chapel Hill-Carrboro City School System.Â