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BoE fretting over federal impact aid again

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POSTED: October 12, 2012 2:00 p.m.

The Liberty County Board of Education could face a mid-year budget cut due to federal reductions, and though it’s premature to name remedies, the district’s financial officer said salaries and benefits could be affected.  
Assistant Superintendent for Administrative Services Jason Rogers on Tuesday provided a summary of the National Association of Federally Impacted Schools, or NAFIS, conference held in Washington, D.C.
“The two biggest topics that we walked away with were sequestration and impact aid,” Rogers said.
One of the purposes of federal impact aid payments is to “assist local school districts that have lost a portion of their local tax base because of federal ownership of property,” according to the U.S. Department of Education’s website.
“Impact aid is really not the best name for the program … a lot of them think that it’s supplemental money that we get that’s given to districts as a way to offset the cost of educating military dependents,” Rogers said. “That’s not the case — the whole program was devised as the federal government’s way of paying its property-tax bill.”
According to a 2011-12 member list on the NAFIS website, the Liberty and Long county school systems are the only Georgia members of the association, though impact aid provides funding to more than 1,400 school districts nationwide.
If the sequester takes effect Jan. 2, it would reduce funding for the U.S. DoE by $3.5 billion to $4.1 billion, according to two estimates Rogers provided.
Of two main federal budgeting agencies, the Congressional Budget Office is projecting a 7.8-percent cut to education funding that would slash $100.7 million from impact aid and $3.5 billion from the U.S. DoE.
The Center on Budget and Policy Priorities estimates a worse outcome, with 9.1 percent in education cuts that would take $117.5 million from impact aid and $4.1 billion from the U.S. DoE.
In Liberty County, the school board could take a $1.2 million hit on the conservative side and $1.5 million under the 9.1-percent estimate, Rogers said.
Worse, the hit would have an immediate impact on the district’s budget because dollars available Oct. 1, the start of the fiscal year, are for the school year that began in August of the same year, according to the NAFIS site.
During the conference, Rogers said his delegation visited Rep. Jack Kingston, Sens. Saxby Chambliss and Johnny Isakson and three other House members — Georgia Reps. John Lewis, Hank Johnson and Tom Graves  — due to their positions on congressional committees.
“We visited six folks and got six different responses,” Rogers said. “They ranged from — with regards to sequestration — that ‘it won’t happen,’ ‘it will happen,’ and my favorite was, ‘Sequestration was supposed to be so bad that it would never happen.’”
So what do the numbers mean for the district?
“Because the majority of our budget is salaries and benefits, an organization cannot experience possible cuts of this magnitude and not touch salaries and benefits,” Rogers said. “I think it may be a little premature to indicate what specific remedies we will look at, but I anticipate further discussion at the October work session.”
Rogers said he presented the information to get the board thinking about ways to find savings.
When asked whether raising the millage rate is an option, Rogers said it’s hard to say without looking at the tax digest.
“Once we receive (the tax digest), we will begin the process of projecting out various revenue amounts based on several different millage-rate scenarios,” he said. “Impact-aid funds are also tied into setting millage rates. In order to maintain our status as a heavily impacted district and receive the portion of impact aid related to that, the district must maintain a millage rate that is 95 percent or more than the current state average.”
What’s more, even if the sequester is averted or if impact aid is not affected, LCSS still could see a decrease in its allocation due to declining enrollment.
Impact aid is calculated according to enrollment counts, and the school system was down almost 300 students from the same time last year, Rogers added.
When the district applies to receive impact aid, it must submit a count based on the enrollment of either the first-20th school day or the second-20th day.
“The first-20th day last year, we had 10,407 students; the first-20th day this year, we had 10,118 — and that means 289 fewer applicants in the pool,” Rogers said. “Now if those are all other kids not related to the military, not related to civil service, then it’s not going to be a big thing — but it’s way too early to tell.”  
While some in the community have expressed that the district could avert some budget issues by spending money on instruction or reducing capital expenditures, Rogers added that the issue is not so simple.
“Approximately 85 percent of our total revenues are grant- and/or program-specific,” he said. “In addition, the money generated through E-SPLOST can only be spent on the allowable construction projects or other areas as approved by the voters on the referendum. E-SPLOST funds cannot be used for salaries/benefits or to pay for the general day-to-day operations of the district.”


 

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