Update, 9:36 p.m. The story has been updated to reflect the board’s budget approval.
The Orleans Parish School Board approved a near $42 million general fund budget* today, close to a 5 percent decrease since last year.
The decrease mainly stems from (1) a drop in expected costs associated with the August merger of McDonogh No. 35 Senior High School and the Architecture, Design, and Engineering Preparatory High School, (2) a reduction in workforce implemented earlier this year and (3) an expected drop in workers compensation claims, School Board officials said.
As the taxing and bonding authority for all the parish’s public schools, the School Board distributes revenues it receives to some schools it doesn’t govern. At their meeting, board members voted to pass nearly $132 million to the Recovery School District and independent charters, and $71 million to its 12 charters. Members also signed off on a short-term $50 million loan to cover costs until tax collections come in early next year.
In the district’s general fund, worker compensation costs decreased by 48 percent, or sightly more than $1 million compared to last year, due to fewer people claiming benefits. Salaries decreased by 2 percent, or a little more than $360,000, due to a reduction in force implemented earlier this year. The workforce reduction was prompted by budget cuts and the impending merger of McDonogh 35 and the Architecture, Design and Engineering Preparatory High School, school board comptroller Wayne DeLarge said.
Projected transportation costs are down nearly $400,000, or 11 percent, also as a result of the merger. Finally, to balance the budget, DeLarge said the district cut funding for materials and supplies by nearly $500,000, a 60 percent reduction compared to last year.
As usual, the district is setting aside a reserve fund of $500,000 to cover unexpected costs, if any.
The speedy public hearing drew only one comment from the audience. Matt Segraves, policy manager at Tulane University’s Cowen Institute, asked why the board appeared to have set aside $8.4 million from its general fund balance to pay off debt.
DeLarge said the cash was not, in fact, coming from the general fund balance. Debt services has its own fund balance, marked as such on the budget documents, he said. The question sparked an animated response from School Board officials, including Superintendent Stan Smith.
“I don’t question any of the other entities when they dip into their fund balance for the appropriate reason,” Smith said, referring to budget practices among charter school boards. The Recovery School District and charter schools start the year with guaranteed revenue sources, as long as their enrollment numbers hold steady, he pointed out, but the parish school board is dependent on its property tax dollars, which are more volatile, he said.
The board also passed a resolution, similar to one it passed before approving last year’s budget, acknowledging that its 12 charters passed budgets prior to Thursday’s gathering, and that the board was essentially signing off on those budgets.
*NOTE: There are two errors on the budget released to the general public, DeLarge notes. The FY 2012 Amended Budget incorrectly reads the FY 2013 Amended Budget, and the line item for “building” should be plugged in with the “custodian/building repairs” line item.