Clayton County Public School Chief Financial Officer Ken Thompson confirmed Monday the district could face a $33.1 million debt by 2016 if measures aren't taken to address finances.
JONESBORO Clayton County Public Schools could be $33.1 million in debt by 2016, the district’s top financial official has confirmed to Clayton News Daily.
And, that is despite the fact that the school system is projected to finish its current fiscal year with a $34-million surplus.
District financial projections presented to the school board Monday are still very preliminary, said Chief Financial Officer Ken Thompson. However, he is warning officials to take steps immediately to keep the district’s coffers from running dry.
“We need to be conservative so we won’t have to make drastic cuts later on,” Thompson said.
Although the prediction looks dire, there are several factors which could impact the district’s financial situation over the next three years.
Chief among those factors is shifting revenue numbers.
Thompson, who has only been in his position for five months, said it is still too early to tell whether revenues will improve enough to avoid the possibility of the district operating in the red.
It would appear likely, based on current data which predicts falling property tax revenue, but Thompson said he is awaiting further information from Clayton County Tax Commissioner Terry Baskin.
“We’re still amassing the revenue projections for next year,” Thompson said.
Predicting revenues and expenditures can be tricky. It is not uncommon for actual revenues to be higher than projected, while real expenditures may be lower than projected.
Then again, the revenues could turn out to be lower than expected while expenditures are actually higher.
It is also possible to see some combination of those two scenarios.
Still, the threat of a projected debt could be unsettling for educators who have already undergone at least three years of continuous budget cuts amid repeated projections of deficits.
The latest news was not welcomed by members of the board. The district is projecting deficit spending during the current school year, as well the next three school years.
Overall, the district is projecting expenses for the current year will be $203,190 higher than the $340.8 million in projected revenues. Next year, the district expects to spend $18.5 million more than it earns in revenues. During the 2014-2015 school year, the projected expenses are $24.3 million higher than projected revenues.
The projected expenditures for the 2015-2016 school year are also $24.3 million higher than projected revenues.
“I am not happy that we are still projecting deficit spending,” Adamson said.
During that time, programs have been cut while others have been threatened. Bus service was cut in 2010 to students living within a mile and a half of their schools. Some employees have also seen their jobs eliminated in recent years.
So far, past predictions that the district would slip into debt have not come to fruition. However, some board members were already fretting the possibility of drastic cuts during Thompson’s presentation.
Thompson said nothing is being ruled out as a way to cut costs but he wasn’t ready to commit what will be done immediately to reduce expenses.
However, there are three words some board members dread most — reduction in force.
School board Vice-Chairwoman Mary Baker said she prays the district has passed the point of cutting positions to balance budgets.
“I really hope we can do a better job of figuring this thing out because I don’t want to RIF anyone else,” Baker said.