Early budget talks for the York County School Division at Monday’s school board work session yielded an unclear outlook for fiscal year 2015.
Uncertainty in next year’s budget comes from the unknown county budget and projected state funding that could be up $2.8 million or down $1 million. Dennis Jarrett, YCSD’s Chief Financial Officer, said much of the uncertainty can also be attributed to the federal government, which is still operating on a continuing resolution after the October partial government shutdown.
One indicator of state funding the division will have available is the Local Composite Index (LCI), a state measure of how able localities are to fund their own school system. The index is determined by taking into account the value of property, adjusted gross income and taxable retail sales of a locality.
In Hampton Roads, York County has the fourth highest LCI, Williamsburg has the highest and James City County the second highest. York County’s LCI — down .0025 from last year — should receive more state funding than Williamsburg-James City County Public Schools.
From fiscal years 2010 to 2013, state funding for YCSD went down $9.2 million, the total operating budget was reduced by $4 million and 124 permanent positions were cut. This year, state funding increased by $300,00, the total operating budget increased by $1.2 million and 19 permanent positions were cut.
An indicator of one upcoming expenditure comes from the Virginia Retirement System Board of Trustees, which recommended an increase in the amount state school divisions pay into VRS by 3.05 percent. That increase would bring the total YCSD is paying into the system to $1.8 million.
The division is also required to shift at least 1 percent of the payment into the VRS system to the employee this year. The change is part of a state requirement that school divisions shift 5 percent of the burden of payment into the VRS system to employees by 2016.
When all is said and done, Jarrett said the school’s current state funding could increase 5 percent to the tune of $2.8 million or drop 4 percent to $1 million. He said though the 5 percent increase is not a best-case scenario, the possible 4 percent drop is a worst-case scenario based on a request from Gov. Bob McDonnell that asks state agencies to submit plans for a possible 4 percent drop in their budgets.
While federal funding to the division is still a mystery because the federal government does not currently have a budget, an early estimate shows the school receiving $9.15 million in Federal Impact Aid — $300,000 less than this year’s division budget. The county receives that money to make up for lost revenue through federally owned lands, which account for 37 percent of the county’s property.
There is also a projected loss of $46,000 from federal Department of Defense funds. In the event of a second year of sequestration, impact aid would be cut by more than 6 percent and other grants could be cut — a possible overall reduction of about $1 million.
County funding is not yet any clearer than state or federal funding, as there is no funding formula for the county. Last year, the division asked for a $3.9 million increase to its budget but received a $1.2 million increase. The deficit between requested and funded money came largely from a last-minute change to real estate tax rates from York County that caused the division to have to cut $1.2 million from their budget.
On Jan. 6, the school board will see an updated but still piece-mealed operating budget for fiscal year 2015. McDonnell will release his proposed budget Dec. 16. A public forum will be held on the budget Jan. 27 where citizens can give input on what they would like to see put into the budget before its completion. The superintendent’s recommended budget will be presented in mid-February.
