After hearing a half-hour presentation by Superintendent Jacque Cowherd, the Fulton Board of Education Thursday night approved a deficit budget that included an average 1.25 percent pay raise for school employees.
Cowherd said the cost of the pay raise would be $139,223 for the 2012 fiscal year starting July 1.
Cowherd offered three options to the board. The first option would have been a salary freeze for all employees and the other two options included the normal salary schedule for employees that carried an average 1.25 percent pay increase for all employees. Some teachers would receive more and some might receive less, depending upon the number of years they have been employed. Most hourly employees such as custodians would receive a 1.25 percent pay hike.
On Thursday night, the board was asked to make 2012 budget decisions on staff levels and pay raises. The rest of the budget will be decided before June when the final 2012 budget is approved.
"This is a deficit budget I am presenting," Cowherd said.
The current 2011 fiscal year ending this June 30 has an operating reserve balance of $4,077,099, or 22.27 percent of the overall budget.
By choosing the option with the salary increase for employees, the operating reserve balance for the 2012 fiscal year starting July 1 will drop to 16.73 percent of the overall budget.
The option with the salary freeze would have provided a 2012 operating reserve balance of 17.80 percent.
Board member Rick Gohring said, "I don't like deficit financing and I think it potentially is going to require us to make some hard decisions next year, but I think the 16.73 percent reserve balance doesn't sound that far out of line."
Gohring then made the motion to accept the budget option with the salary increases. His motion was approved unanimously by the seven-member board.
The option selected also calls for a reduction of three full-time jobs. Two of those jobs are through retirement of current staff members. Their duties will be assumed by other employees, accounting for two of the three job cuts.
The other full-time job equivalent would come from foreign language instruction and the gifted program by cutting full-time teachers to part-time for those duties.
Cowherd said student enrollment in foreign language classes is down and a full-time teacher is no longer needed. The gifted program also would be handled with a part-time employee.
He said local and federal revenue is stable but the potential problem with the school budget is from state aid.
The answer to state aid won't be known until after the Missouri General Assembly adjourns in May. By then teacher contracts with the pay raises are expected to be signed and delivered, removing the salary freeze as an option.
Any adjustments in the 2012 budget that need to be made before June would likely come from cuts in transportation or in other items, not salary cuts or job cuts.
Asked why he recommended a salary increase rather than saving the money for the expected budget crunch in 2013, Cowherd said, "We have to maintain a competitive advantage to get and keep good teachers in this district."
"We've got great teachers right now, but we need to maintain a competitive advantage to keep them here. I don't want to take a chance that they might quit and go somewhere else," Cowherd said. "Good teachers are hard to find."
Cowherd said the real budget crunch is expected to hit in 2013. At that time, he said, the district will have to look at reducing bus service to children.
"But in 2013 there also is the thought that it is time to ask the public to support a tax levy increase," Cowherd said. "It's possible also that revenue from casino gaming and the lottery will increase. Even though they are down now, gaming revenue is inching up."