The Glynn County Board of Education and local school district leaders have kicked off the planning season for the fiscal year 2021 budget.
Lawsuits this past year significantly reduced the school system’s general fund balance. The school district began fiscal year 2020 with a general fund balance of nearly $25 million. That fund balance dropped to $15.5 million after a lawsuit settlement payment.
The school board heard Thursday a presentation on the parameters and priorities of this year’s budget.
More than 13,000 students are currently enrolled in Glynn County Schools. The school system, one of the largest employers in Glynn County, has 1,994.5 full- and part-time employees.
Around 56 percent of the school system’s expenses are funded through local property taxes. About 44 percent of expenses are funded by the state, through Quality Basic Education (QBE) funding. And less than 1 percent of funding comes from the federal government.
The school system’s millage rate has remained the same, at 16.157, since 2015.
Because of lawsuit payments made this year, the school system will need to find ways to begin building up its general fund balance again, said Virgil Cole, superintendent of Glynn County Schools, during the work session Thursday.
The biggest hit to the fund this year, Cole said, was the payment required after the ruling in a class-action lawsuit, resolved in 2019 after seven years in the court system, which dealt with Glynn County’s misapplication of the Scarlett Williams property tax homestead exemption.
“Of course, we weren’t a part of this lawsuit,” Cole said. “This was a lawsuit that was made against the county, or the tax assessor’s office. It’s been going on apparently for years. We found out about it a little over a year ago.”
The county announced a $17.5 million settlement in October. Because the school system receives a significant portion of local property tax money, the district had to pay a larger portion of the settlement.
“Ours was a little over $10.5 million,” Cole said. “Thankfully, we have done a very good job, I think, over the years of building our reserve to the point where we could pay that all at one time. Certainly, it was the biggest check I’ve ever signed.”
The Senate Bill 486 homestead exemption annually leads to a loss in revenue for the school system, Cole said. The bill provides a homestead tax exemption on property taxes collected for the school board to residents who are at least 65 years old and whose net income does not exceed $40,000.
“For this past fiscal year, it cost this district about $6.6 million,” Cole said. “Cumulatively, that’s a little over about $50 million over the last seven years.”
The school system is also challenged by gaps in what state funding covers. The state began to fully fund the QBE formula in 2018, but Cole said that funding does not cover the costs of social security, extra curricular and athletic activities, pre-kindergarten, retirement for employees not covered by the Teacher Retirement System, substitute teachers, school resource officers or transportation. And nurses are 81 percent unfunded, he said.
Teacher retirement and classified employee health insurance costs for the school system have also increased in recent years.
Andrea Preston, assistant superintendent of finances for Glynn County Schools, said the teacher retirement rate has inclined steadily since at least 2012. In fiscal year 2012, the school system covered 10.28 percent of the cost. In fiscal year 2020, the school system covered 21.14 percent.
“The good news is, next fiscal year it’s going down to 19.06 (percent,) which will save us $1.5 million,” Preston said.
School system leaders have numerous priorities going into this year’s budget planning period, Cole said. Those priorities include maximizing state funding, allocating at least 75 percent of the general fund to local schools and maintaining a competitive compensation/extra-curricular supplement structure.
The school system also needs to work to get as close as possible to a balanced budget this year, Cole said.
“As y’all know, in years past, we’ve kind of had this number around $18 (million) to $20 million, maybe a little bit more obviously, and we’ve kind of had a budget deficit of $2 (million) or $3 million,” Cole said. “But through very conservative budgeting, we end up not really spending all that and kind of coming back into the number we originally started with.”
The school system needs to begin building up its reserve again, he said.
The system hopes to move toward maintaining a fund balance of about $21 million. Other priorities this year include continuing to have a transparent budgeting process and continuing to demonstrate sustainability related to budget recommendations, which means ensuring that any budget addition can be afforded year after year.
And while no word has come yet from the governor’s office or state legislature about potential pay increases for school employees, Cole said Glynn County Schools will prioritize passing along pay increases for teachers, both in and outside of the classroom.