Posted: Thursday, May 21, 2020

FY21 Budget - First Reading

No millage increase in proposed FY 21 General Fund budget;
Superintendent recommends multiple measures to prepare for possible revenue shortfalls

In the First Reading of the FY 21 Greenville County Schools’ General Fund budget on Tuesday, Superintendent W. Burke Royster described this as “a year of great uncertainty.” He went on to recommend a General Fund budget with no millage increase, in recognition of the challenges facing local businesses, and reductions to spending that include allocation freezes totaling $5.6 million, a delay to the planned CTE Innovation/Incubation Center ($10 million), and a change in the teacher allocation formula for grades 2-5. In all, the administration identified $55 million to be eliminated or held in preparation for potential revenue reductions this year and next.

“A year that initially appeared to have one of the brightest revenue projections in recent history took a sudden, deeply negative turn with the outbreak of COVID-19,” said Superintendent Burke Royster. “Now we are looking for ways to maintain our current programs both this year and in future years, knowing the State is backfilling this year’s continuing resolution budget with a surplus that is not expected to be generated again. We have reason to believe, as difficult as this year will be, next year is likely to be even more difficult from a fiscal standpoint.”

As a result of the State’s continuing budget resolution, funding levels for South Carolina’s public schools will remain the same as the current year. Despite this, because of student growth that was higher than expected this year and expectations of 1,000 additional students next year, the District expects an approximate increase of just under $10 million in state revenue through the Education Finance Act (EFA) formula, Employer Fringe Benefits, and State Aid to Classrooms. The district is also expecting an increase in local revenue due to the increased value of the operational mil. As a reminder, the operational millage no longer includes owner occupied homes since the passage of Act 388 in 2006.

New expenditures for FY 21 include the following state mandates:

  • $1.5 million salary increase for teachers who upgrade their certificates (i.e. move from bachelors to masters),
  • $674,000 mandated to re-enroll working retirees in the District’s PEBA health insurance coverage,
  • $1.5 million in a required State Health Employer contribution increase, and
  • $755,000 to increase working retirees salaries from 95% of the posted salary schedule to 100%, as required by the scheduled ending of SC Statute 59-25-57.

Additional identified increases based on local needs include:

  • $4 million to meet projected student growth
  • $502,000 to hire 6.5 special education teachers to meet the regulations of IDEA
  • $867,000 to complete Rudolph Gordon School’s expansion from a K-5 school to K-8
  • $295,000 to hire new positions needed to prepare for the opening of Fountain Inn High School in the fall of 2021
  • $155,000 to hire two positions to meet growth in career and technical programs in the areas of mechatronics and machine tool
  • $193,000 to hire positions needed to open Roper Mountain Science Center’s new Environmental Science and Sustainability Center
  • $75,000 for additional instructional materials
  • $334,000 to restore working retirees’ negotiated salary – support personnel
  • $46,000 to hire Roper Mountain Science Center Animal Caretaker and additional Security
  • $252,000 Increase in SRO’s contracts (based on hourly rate change implemented last year by Sheriff’s Office)
  • $1,500,000 projected cost of additional cleaning related to COVID-19 (both time and supplies)

The legislature has suspended step increases for teachers due to both the significant decline in revenue and concerns about the depth and length of the economic impact. Likewise, Royster described the District’s philosophy as being focused on taking a conservative tact that will reduce the likelihood of employee furloughs (short-term layoffs) or a reduction in force.

FY 21 GENERAL FUND BUDGET

BOARD BUDGET FIRST READING SUMMARY

MAY 26, 2020

Projected Revenue – State Funding - $417,160,000: The projected total revenue from the EFA Formula (Base Student Cost) is $188,261,000.  We are also projected to receive $105,776,000 in EFA Employer Contributions to help fund the district’s employer fringe cost associated with employee compensation. In the Teacher Salary revenue line, GCS is projected to receive $14,722,000. The district also receives State funded Homestead exemptions (Tier I, II, and III) of $97,700,000. The other State revenue consisting of Bus Driver compensation, merchant’s inventory, manufacturer’s depreciation and other State revenue will total $10,701,000.

Projected Revenue – Local Funding - $237,673,000: Projected local funding consists of property taxes ($205,086,000), Fee-in Lieu of Tax agreements ($23,402,000), Tax Increment Financing revenue ($6,000,000), interest income and other miscellaneous revenues ($3,185,000). This represents an annual increase of $318,000 based on growth in the value of a mill. Current local tax millage for the General Fund is 150.8. Per Act 388, no taxes are collected on owner-occupied homes to support the General Fund budget, but School Boards can raise millage on other property (businesses, cars, motorcycles, etc.) based on a formula built to meet inflation and population growth. For FY 21, 5.2 mills is available to the Board as a result of applying that formula. The Board has at its disposal 9.8 mills in carryover from previous years.

Projected Transfers In:  $23,809,000 –The majority of this is the State funded EIA Teacher Salary Supplement.

Additional Expenditures Due to State Mandates: The items shown below are mandated through legislation and total $4,354,000.

Teacher Certificate Upgrades (i.e. bachelors to masters)

$1,470,000

Working Retiree Insurance – cost moved from PEBA to GCS

674,000

State Health Employer Contribution Increase of 6.73% (effective 1-1-21)

1,455,000

Restore Working Retirees Negotiated Salary – Teachers

755,000

Total

$4,354,000

Additional Expenditures under Consideration1: The following items totaling $8.2 million reflect priorities needed to meet local requirements of the Education Plan for FY 21.

Increases Associated with Student Growth

$4,070,000

Special Education Teachers for Growth

502,000

Rudolph G. Gordon (addition of 8th grade)

867,000

Fountain Inn High School

295,000

Program Growth for CTE – Mechatronics and Machine Tool (2.0 FTE)

155,000

Roper Mountain Science Center New Building Instructional Personnel (2.0 FTE)

193,000

ESOL Interpretation Services, Add-on Enrich Model

75,000

Restore Working Retirees Negotiated Salary – Support (equity)

334,000

Roper Mountain New Building Support Personnel and Security

46,000

SRO Contract Increase

252,000

COVID-19 Additional Cleaning/Disinfecting Costs

1,500,000

Total

8,289,000

Reduction in Expenditures1: Given that the continuing resolution does not provide additional funding, GCS proposes the following reduction to the General Fund Budget.

Increase Elementary (grades 2-5) Teacher formula from 2 over to 3 over

($2,471,000)

1 The Superintendent is required to present a balanced budget to the Board of Trustees.

Preparing for Potential Revenue Reductions – Additional money to be held in reserve until budget picture is clearer

“Frozen” items

$5,600,000

CARES ACT

17,600,000

General Fund - Fund Balance (existing)

15,000,000

Delay CTE Innovation/Incubation Center (allocated from General Fund)

10,000,000

Estimated Additional Fund Balance (from FY 20)

6,800,000

Total

$55,000,000

Next Steps:

  • Tuesday, May 26, at 9:00 a.m. – First Reading of the FY 21 General Fund Budget
  • Public Hearing – submit comments by 6 p.m., June 14.
  • Monday, June 15, at 6:30 p.m. – Second Reading of the FY 21 General Fund Budget

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