Fulton Schools’ Contingency Budget Would Force Deeper Cuts

If voters say no to the Fulton school district’s proposed budget this May, they could force the district into the rare position of having to adopt a contingency budget that is lower than the proposed budget.

The current draft of the district’s 2010-11 budget spends 0.6% more than this year’s budget. It requires a 3.8% increase in the tax levy because of the $1.4 million cut in state aid to Fulton. The district will cut 18 positions, many of them through retirements.

But as a district budget committee held its final meeting Tuesday night, the group made up of Board of Education members, district administrators and members of the public reviewed for the first time what the district’s contingency budget would look like if voters turn down the proposed budget twice.

Under state law, contingency budgets can only rise by either 4% or 120% of the previous year’s Consumer Price Index, whichever number turns out to be smaller. (Certain expenses, such as community use of school buildings, cannot be part of a contingency budget and must be factored out.) But that formula did not foresee the possibility that the Consumer Price Index would be a negative number.

So the district showed the committee what would happen if the district was forced to use the -0.4% CPI. The district would have to cut another $509,000, on top of the $2.8 million in spending cuts it took just to get to the proposed budget. It would mean more lost jobs and cuts into academic programs. It would leave the tax levy increase at about 1%.

The state may allow districts to set the contingency budget at 0%. If so, the district would have to cut $283,000 to make the contingency budget level. The tax levy increase would be about 2%.

There have been many years where the contingency budget would have been higher than the proposed budget. Not this year.

“The good news just continues,” said Kathy Nichols, the district administrator in charge of the budget.

Community committee member Jeff Coakley neatly summed up the risk: “They’re going to have an incentive to vote this budget down.”

The state is also considering letting districts use a 5 year CPI average to compute the contingent budget. That would produce a contingency budget slightly higher than the district’s current proposal.

The district will produce a new draft of the budget for next week’s Board of Eduction meeting, reflecting any changes in the last two weeks. There are not expected to be many changes, as the state Legislature has not yet approved its new budget.

There might not be a budget by April 13, when the district expects to adopt its budget. The community votes on the budget during the statewide school budget voting day on May 18.