The Franklin County School Board passed their annual budget on Tuesday and it includes several measures the system’s financial officials have taken to help the system slowly move out of debt.
The Franklin County School System will begin fiscal year 2012-2013 with a balance of  negative $5 million, but FCS financial officer Carla Knight said even though that number sounds grim, it’s actually an improvement from where the school was at the same time last year.
Knight said the tremendous hole of debt the school system is facing is a direct result from the three years of proration the system faced in 2009, 2010 and 2011.
Knight said during those three years, the school system had to borrow over $4 million to cover the expenses they were cut due to proration.
“Many people think that if a school can get through a year of proration, they’ll be fine until another proration is declared, but that isn’t the case,” Knight said. “We don’t just get out of the woods once proration is over. Those three years of proration have basically cost us 10 years of being in debt from the $4 million we had to borrow.”
Knight said once the school system is placed on proration or their funding is reduced, it isn’t as simple as laying off teachers or support personnel to make up the difference.
“In the education system, we have a Foundation Program that tells us we must have a certain number of teachers based on the number of students we have enrolled in our school system,” Knight said. “That number isn’t negotiable. If they say we have to have 40 teachers, or teaching units, we must have that number. Period.
“The problem comes when we face funding cuts or proration. We’re being told that we have to have a certain number of teachers, but we aren’t getting the funding to pay for all of them, so we have to start funding some of them with local money – and right now, there’s no local money to be had.”
Knight said by law, the school system is required to have a one-month fund balance in place so that they will have a cushion in case proration is declared again, but she said having a $5-million deficit makes that impossible.
“In our case, the best we can do is show them that we’re improving and that we have a plan to get ourselves out of debt,” Knight said. “I have to prepare a report once a year and show our upcoming budget and our strategy for what we’re doing to improve.”
Knight said most of the measures the school system has planned for this upcoming fiscal year are small but should ultimately help the system save money.
“One example is at our bus shop – we had two employees who retired this past year but we’re only replacing one of them,” she said. “This saves us money without having to lay any one off.
“We’re hoping attrition like this will take care of most things without us having to lose any teachers.”
Knight said a big thing that has helped, and will continue to help, the school system is the one-cent sales tax they receive. Franklin County residents voted in March to keep the tax in place for another two years.
“Our system receives a little over $1 million annually from this tax and it’s a tremendous help to us,” Knight said. “The money is absolutely crucial to help us continue to fight to get out of debt and we appreciate the citizens seeing fit to pass it for another two years.”
Knight said if the proposed budget that passed on Tuesday holds up, the school system should have a negative $3.9 million balance by the end of this fiscal year.
“Those are very optimistic numbers, but we should end up somewhere near that figure,” she said. “We’re just going to keep pushing forward and doing all we can to get back to where we need to be.”