As everyone is already aware, Governor Culver announced two weeks ago he was cutting 10% of state aid to schools for the current fiscal year. Even though we knew state revenues were down and a cut was anticipated, the percentage was much more than expected. The cut raises the question: "What will the reduced level of funding mean for North Tama Community Schools?"
In order to answer that question, we must first understand the numbers. Last year the Governor cut 1.5% from education; the impact on our district was $35,379. Thankfully, the entire amount was later back-filled with federal stimulus dollars.
Regarding the current fiscal year, last spring the state legislature reduced our state aid by $252,028. Of that amount, $219,194 was back-filled with federal stimulus dollars. Last week's announcement of an additional 10% reduction of state aid means we will be losing another $245,849. Our total loss of state aid for the current fiscal will be $278,683, which brings us back to the original question, "What does the revenue loss mean for our school?"
The district's goal is to always provide the best educational programs possible within the constraints of the budget. Last spring we anticipated several lean years and made reductions in staff and spending. In the upcoming weeks, we plan to look for additional ways to improve efficiency within the organization. Further savings will be minimal unless we sacrifice programming. As with all schools, over 80% of our budget is committed to staff salaries and benefits. The remaining 20% is allocated for necessities, such as bus fuel and utilities, which are difficult to reduce. To alleviate the loss of revenue, we will have to rely on our cash reserves. Our cash balance will drop to approximately $340,000 as a result of the before mentioned $278,683 loss of state aid. Dropping our cash balance to the $340,000 level is an uncomfortable margin on a $5.2 million general fund budget. At this point in the school year, however, we believe reduction in spending and reliance on cash reserves to be the best course of action.
North Tama has a rich history of having a solid school system which has produced many high achieving students. In the upcoming months, I will be working closely with the school board and staff in managing the district's budget in a responsible way, while doing our best to maintain quality programs for our students. We have seen tough times before and we have gotten through them. We will get through this current situation as well, by working together and staying focused on the most important outcome, the successful education of our students.