Analysis: School districts might not be able to cover budget cuts

ACROSS MISSISSIPPI — At least 18 of 152 Mississippi school districts might not have enough money to cover a cut in state funding, an Associated Press analysis finds. Those districts could be forced to borrow money, cut services or raise taxes to make up the difference.

That includes districts considered poor, such as Shaw in Bolivar County, and affluent ones like Pass Christian in Harrison County.

Gov. Phil Bryant wants districts to dip into their bank accounts to make up a $72.9 million cut in state funding. That works out to a cut of just under $150 a student.

On Dec. 31, 11 districts reported a negative balance, which typically means they borrowed money to tide them over into the next year. Another seven districts had less than $150 per student in reserve.

The state formula calls for combined state and local funding of $5,015 per student this year, although most local districts add local taxes. Bryant’s proposed cut works out to 3.7 percent of this year’s state contribution.

All school districts keep money in a maintenance fund, which functions something like a checking account. The fund swells when districts receive property tax payments early in the calendar year. Schools then live off those sums the rest of the year.

Total balances statewide fell from $615 million on June 30 to $462 million on Dec. 31. Of the $462 million, at least $10 million was legally earmarked and thus unspendable. AP used Dec. 31 for its analysis to examine which districts would fare worst if state money is cut.

On average, districts have $923 per student in the bank.

Bryant, like predecessor Haley Barbour, describes the money as “reserves,” which makes superintendents recoil.

“That’s working cash, money we have to have to operate our schools on,” said Milton Kuykendall, superintendent of DeSoto County schools. The state’s largest district, DeSoto had nearly $57 million at year’s end. That’s the most of any district and nearly one-eighth of the statewide total. On a per-student basis, DeSoto ranks No. 23, with $1,764.

The state’s most financially sound district, per-student, is tiny Clay County, so small that it sends its junior high and high school students to neighboring West Point. Also among the richest, per student, are the Delta districts of Leland, Humphreys County, Western Line and Mound Bayou.

State school officials say districts were advised to save money in 2010, when they received an unexpected windfall from federal stimulus funding. But not all districts did so. For example, Billy Ferguson, superintendent of Carroll County schools, said his district spent the money to keep employees it would have otherwise fired.

Ferguson said the district “never” saves. “We spend just about everything every year,” he said.

As of Dec. 31, Carroll County was carrying a deficit of $1.55 million. That was the worst deficit per-student in the state, at negative $1,575. The district survives by borrowing from money generated by its 16th section school lands. Carroll County is repaying the borrowing as property tax receipts roll in, Ferguson said.

“We’re like a bear, we’ve got to get fat,” Ferguson said. “Very little money comes in the rest of the year.”

Not too fat, though — Ferguson said his district has “never really recovered” from earlier reductions implemented under Barbour. He said Carroll County doesn’t have assistant principals at some schools, has trouble holding onto teachers because it doesn’t supplement salaries with local money, and bought a bus last year for the first time in four years. The system survived earlier cuts by closing an elementary school, saving $350,000 a year. But some students now have to travel so far to school that the first child boards a bus at 5:50 a.m., two hours before school starts.

The district could raise taxes, and did so last year, but Ferguson said the county school board generally opposes tax increases. That leaves it vulnerable to state cuts.

“When they cut, they hurt us,” Ferguson said. “It just limits what we can do.”

To aid districts such as Carroll County, Bryant would add $6 million to a state emergency loan program. But special aid for broke districts is likely to make other school systems unhappy.

“You penalize people who have been good financial managers,” said House Appropriations Chairman Herb Frierson, R-Poplarville.

Borrowing also is an invitation to a cycle of debt, superintendents and state officials say. Once a district takes a short-term loan to tide it over, it’s likely to have to do so again the next year, unless the budget sharply improves.

The AP analysis found no link between a district’s financial condition and other measurable factors, including:

— Percentage of impoverished students in a district, as measured by those eligible for free or reduced-price lunch.

— Percentage of enrollment made up of non-white students.

— Number of students attending class in a district.

— Academic performance, as measured by the state’s quality distribution index.

For example Clay County has only 161 students, is majority-black and has 98 percent of students eligible for free or reduced-price lunches. Yet it had $2.5 million in the bank as of Dec. 31. At $15,665 per student, that’s more than three years’ worth of current state funding formula.

Still, Clay County Superintendent Mae Brewer isn’t interested in spending district money to help bail the state out from its own budget troubles. She said the district has been saving money to put a new roof on its only school, which serves grades K-6 in Montpelier.

Brewer says she feels the state has reneged on its promises to support schools.

“We were told we were going to be fully funded and it hasn’t happened,” she said.

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