This letter was recently published in the Pickens County Courier.
In June the Pickens County School Board passed a budget that had more expenditures than revenue coming in for the first time in 10 years. (See the video below for more on that.)
At the November 23rd meeting the district administration proposed and the board approved spending $80,000 on a second Assistant Principal pay-raise for the year. I voted against it for a couple of reasons. Giving the second pay raise during the year was not required or necessary now under the law or by contract. It is unwise to increase spending mid-year when the budget is already spending more than is coming in.
The decision on giving Assistant Principals an extra pay raise should have waited until the next fiscal year which starts on July 1. If revenue continues to grow, the new recurring $80,000 expense would then be covered with recurring revenue. An expense-revenue balance that will keep the district out of the financial ditch in the long-run.
Later in the meeting the board approved $50,000 in additional spending — another recurring expense the district doesn’t have recurring revenue to cover. Again, I voted against the additional deficit spending. Adding it up, the budget is now spending $500,000 more than the revenue flowing in this year.
The past few years we always budgeted to spend less than revenue flowing in. That is, a few hundred thousand dollars of revenue was set aside for mid-year costs that cropped up or if the administration came to the board wanting to spend on this or that new item. That way, extra revenue was there to cover such mid-year expenses. If all the extra revenue wasn’t spent, at the end of the year it went into savings, so savings grew over time. Prudent financial management.
With this year’s budget, the board/ administration budgeted to spend more than was coming in so the budget was in deficit right off the bat.
The administration is plugging the recurring deficit with one-time money or savings. Savings are limited, and run out in time making such deficit spending a bad habit to fall into. Also, the district should be growing savings in good economic times, because we’ll surely need the extra cash when the next recession hits and revenue falls.