Cape schools prepare deficit budget

Saturday, July 17, 2004

Even with a fresh $1.2 million shave, Cape Girardeau School District's 2004-2005 budget is left with financial stubble.

In January, the Cape Girardeau School Board approved about half of the $2.2 million in cuts needed to balance next year's budget, creating a deficit. The $35 million budget, which board members will put to a vote Monday, has an ending fund balance that places the district within $1 million of being financially distressed. A "financially distressed" label means a school district loses some control of spending to the state.

"Our goal wasn't to balance the budget," said superintendent Mark Bowles. "It was to cut as much as we could stand without hurting the educational process too much."

The cuts approved in January include eliminating five teaching positions, charging participation fees for high school activities and a salary freeze.

"I think these are the toughest times we've been through," said Sharon Mueller, vice president of the school board. "We've played it out conservatively, and I hope we come out better than that, but we may not."

The district's projections for 2004-2005 show the total fund balances slipping from $5.03 million to $4.26 million over the next 11 months, which equals deficit spending of around $770,000.

"We made a commitment to maintain if not raise the balances every year, but that may not be doable given the circumstances," Mueller said. "That's not to say we haven't been lower, but we're trying to run as lean and mean as possible."

Bowles said officials knew there would be deficit spending for 2004-2005, even with the budget cuts.

"We budgeted conservatively. If projections swing the wrong way, we can't absorb much," Bowles said. "If our projections are all overly conservative and we'd cut that $700,000, how many teachers would that be? I think we did the right thing."

At the end of next June, officials estimate the district will have 6.6 percent of expenditures in reserve, just a few percentage points above the state's required 4 percent in reserve. The district calculates the reserve percentage by dividing the general fund balance of $2.077 million by the combined general fund and special revenue fund expenditures of $31.313 million.

Officials predict next year's expenditures will rise by $37,000 with revenue rising by $1.5 million, mainly through an additional $1.12 million in federal funds.

More than half of the district's $35 million in expenditures go toward regular instruction costs, which include teachers' salaries. Special services and operational costs take up 20.3 percent and administrative costs take up 8.5 percent. Transportation and other costs represent the remainder of expenditures.

Around 63 percent of the district's $34.4 million in revenue comes from local sources, such as property taxes. State funding makes up 19 percent of revenue, while federal funding is 14 percent and county funding is 2 percent.

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