With a green light to spend district reserves to plug financial holes, Rock Hill schools Superintendent Lynn Moody on Monday said she plans to scale back her proposed budget cuts.
The school board was expected to vote on her plan to cut $6.7 million out of an anticipated $122 million budget for next school year.
But after lengthy discussion the board decided not to suggest or approve a plan, but rather to agree to allow Moody to rely on at least $2 million in reserves when crafting the budget for the 2011-2012 school year.
That's likely to result in a scaled-back version of Moody's original "financial crisis plan."
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Moody offered a glimpse of how her proposed budget cuts would be scaled back:
No employee furloughs. Her original plan included sending teachers on unpaid leave for two days and other employees for four days.
Teachers would get to keep the $275 that the state sends them for classroom supplies. Moody had proposed using that money to make up for shortfalls.
No cut to parent services. The district's Parent Smart program, which works with the Early Learning Partnership of York County to provide educational and nurturing services to families, was to be cut $100,000.
Keep a groundskeeper job. The plan included eliminating the position and leaving it up to coaches and booster clubs to maintain athletic fields.
Avoid raising the rent by about $45,000 on Head Start, a national program for pre-schoolers from low-income homes.
Let elementary school secretaries work their full schedule. The original plan cut the number of days secretaries work.
No board members objected to Moody's changes. What's not clear is whether the group will agree to spend more than $2 million from reserves. Board members disagree over how much to rely on the finite amount of money.
The district's reserve fund - also known as a fund balance or "rainy-day fund" - is the money left over each fiscal year after a district pays all of its bills. Districts bank the annual overages, which come in handy when unforeseen costs arise.
Credit rating agencies assess reserves when assigning school districts a credit score. A healthy cushion tends to earn a higher rating, which can mean lower interest rates when districts borrow money.
Rock Hill schools ended the 2009-2010 school year with roughly $17 million in reserves. It's too early to tell whether the district will have to use reserve money to finish this school year.
"I can't support going over $2 million," board Chairman Bob Norwood said. "I always felt like a cushion is a nice thing to have, just like in a family budget."
"I want to protect the financial stability of our district," he said.
"We have already streamlined," school board member Ann Reid said. "Everything left now is critical."
If it comes down to relying on reserves or cutting jobs, Reid said. "I would cut it down to the very minimum."
The amount of reserve money used could determine how many job cuts the district makes. Even with $2 million from the fund balance plugging holes, Moody still expects to have to make up about $4 million. That would come mostly from eliminating roughly 50 jobs and slashing some employees' pay.
Also up for debate is a tax increase.
Moody's original plan included possibly raising operating taxes 1 percent. That would cause an owner of a retail business or a rental house valued at $100,000 to pay roughly $12 more in property taxes for school operations. State law exempts owner-occupied homes from taxes that pay for school operations.
Board members disagree over whether to implement that.
Norwood argued against raising taxes, while board member Mildred Douglas suggested using a combination of reserves and a small tax increase.
Part of the problem with planning the budget at this point, Moody told the board, is that projections for how much money to expect from the state are iffy. Things could change once lawmakers pass the state's spending plan.
State money for schools has been shrinking for the last three years as sagging sales tax revenues leave gaping holes in South Carolina's state budget.
Moody said she expects to present a budget within the next two months.