Pouring over reports from 91 percent of Indiana public schools about the effect Gov. Frank O'Bannon's proposed flat-line budget would have on education, Randy Burns said Thursday there are items about the plan that aren't known yet.
"We don't know what flat-line means. We don't know how it will be applied," the Clay Community Schools director of business affairs said.
To explain his theories on how it may be applied, Burns suggested two possibilities.
"First, we could receive the same dollar amount as last year. Or, we could receive dollars based on size," he said.
A growing school corporation would be hurt if it received the same dollar amount because money needed for the increased student count would not be available. But a dwindling school corporation would benefit because it would receive as much money as when student count was higher.
But if the dollars are based on student count, a dwindling school corporation would suffer while a growing school corporation would benefit.
"Remember, last year dollars were cut from the previous year. As far as size, most likely our numbers will remain fairly stable for student count. We may not be hurt quite as much if they give us the same amount as last year. But we'll still be hurting because of the rising fixed costs," he said.
On the average, school corporations will need in excess of a 3 percent increase in funding to sustain present programs with existing salaries. Increased enrollments, utility costs, insurance increases, coupled with existing salary increase schedules, combine to cause the unavoidable increase.
O'Bannon's proposal specifically calls for removal of grant funding for all school transportation categories and Americans with Disabilities Act Flat Grant. ADA Flat Grant money is based on the ADA student count in the fall at each school corporation.
"Clay Community Schools deposits money into both funds. The General Fund is a fixed amount of $114,663 and the remainder goes into the Debt Service Fund. Last year, we put $51,000 into Debt Service," Burns said.
For school corporations that deposit ADA Flat Grant monies in their General Fund, the proposed budget cuts the General Fund revenue of those school corporations. For school corporations that deposit ADA Flat Grant monies in their Debt Service Fund, the local tax rate will necessarily be increased to replace the lost dollars to pay the debts of those school corporations.
"Most of the burden is already on the local taxpayer anyway. A large part of it comes from property tax. But other taxes make up revenue for the Debt Service Fund as well, such as excise and financial institution taxes. If state funding is gone for transportation as well as ADA Flat Grant money, that burden will also shift to the local taxpayer and most likely the tax levy cap on transportation will need to be increased," Burns said.
Some school corporations have strong cash balances and will be able to avoid harmful cuts for the short term. Others, with minimal cash balances or growing school corporations, will face layoffs and program cuts and/or increased class size.
"Our (Clay County) school district absorbed most of the revenue reduction in 2002 by using our cash balance. We have no other sources of revenue; therefore staff reduction is our only option. The end result will be increased class sizes and/or reduction in programs such as Advanced Placement, which typically has small enrollments," was the local response to a survey conducted Indiana Association of School Business Officials, Indiana Assoc. of Public School Superintendents and Indiana School Board Association about the effect O'Bannon's proposed flat-line budget would have on Clay Community Schools.
Editor's note: Tomorrow The Times will report specific survey data given by Clay Community Schools.