Though we do not yet know how funds will be distributed to school districts if Gov. Frank O'Bannon's proposed flat-line budget for education passes, we must presume for the time being that the monies will remain constant.
If so, Clay Community Schools officials expect $27,726,003 will be approved for the General Fund budget over the next three calendar years.
Americans with Disabilities Act Flat Grant monies will be reduced by one-half for fiscal year 2004 and will be eliminated for fiscal year 2005. This means the first reduction will be in July 2003 and the second in July 2004.
Clay Community Schools will loose $57,331 in ADA Flat Grant monies in 2003 and $114,663 over the next two years. Subtracting the General Fund ADA Flat Grant monies from the budget amount, Clay schools will have in it's General Fund only $27,688, 672 in 2003 and $27,611,340 over the next two years.
Projected expenditure increases that the district must pay are health and property insurances, utilities, salaries and other (annuities and various retirement funds). No additional pay raises beyond those already in place through negotiations were calculated. For calendar year 2004, Clay school officials project a $178,978 expenditure for these costs and for calendar year 2005 the cost will rise to $195,266.
In order to operate the school district in regard to an adequate cash balance, reductions in the General Fund expenditures must be made. Clay schools are projecting a $1million reduction for the next three years in addition to the above expected expenditures in unavoidable costs.
Where will Clay Community Schools make cuts to gains these reductions?
Certified positions would need to be eliminated by 15 while 16 classified positions would need to be eliminated in 2003. In 2004, 15 certified and 20 classified positions are projected to be eliminated. For 2005, three positions from both categories would be eliminated.
"Our (Clay Community) 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 Assoc. of School Business Officials, Indiana Assoc. of Public School Superintendents and Indiana School Board Assoc. about the affect O'Bannon's proposed flat-line budget would have Clay Community Schools.
Projecting the loss of one-half of the ADA Flat Grant monies in 2003 and the entire amount for 2004 and 2205, along with the projected loss of the entire amount of transportation (including both special and vocational education transportation) in 2004 and 2005, Clay Community Schools officials were asked to determine the increase in property tax levy and rate necessary to fund losses to the General and Debt Services Funds.
Expected average losses for 2003 locally are 4535,401,447. Losses for 2004 total $505, 688. The tax rate needed to recover the losses would need to be increased to 9.4 cents. For 2005, losses are projected to be $510,566 with a tax increase to 9.5 percent.