NORTH FULTON, Ga. – A preview of the Fiscal Year 2020 budget for the Fulton School System includes employee raises, but also reflects challenges to the district as it absorbs lower tax revenues and diminishing state funds linked to declining enrollment.
Managing the challenges, noted district officials, will rely on Fulton’s healthy reserve funds and cost-cutting measures implemented this year.
During a board meeting in March, Chief Financial Officer Robert Morales outlined the revenue forecast for FY20, expenditure projections and the next steps in the coming months. The School Board is expected to approve the budget in June; the fiscal year starts July 1.
Early projections are a district budget between $1.03 billion to $1.07 billion, depending on state action on funding for teacher raises. The current year’s budget is $1.09 billion.
The biggest impact to the district’s revenue picture is the cap on residential property assessments passed by Fulton voters last year. The new law resets the taxable portion of residential property values to their lowest level over the past three years, then allows a maximum of a 3 percent increase in subsequent years.
Morales described the impact as a “funding cliff” for the school system.
“We are facing an initial decline in local tax revenue [since] the referendum overwhelmingly passed,” Morales said. “Fortunately, our board policy allows the district’s fund balance to be used to bridge the decline.”
A declining enrollment next year also comes with a reduction in state funding by $5 million. The state is also increasing the amount withheld for its “fair share” allotment which withholds earned state funding from wealthier districts to redistribute to those less wealthy.
The system may be able to recoup some of that funding by ensuring all students are categorized correctly based on the services the student receives.
Morales said the district has also aggressively looked at strategies to increase revenue streams and cut costs through districtwide belt-tightening.
The FY20 budget projection includes elimination of several non-teaching positions, and across-the-board reductions in central office departments.
Early revenue projections show existing homestead exemptions and the property tax cap will result in a 4 percent decline from 2019.
Highlights of the proposed FY2020 budget include at least a $35.5 million allotment to fund teacher and staff raises. The move follows the state’s approval of additional state funding for teacher raises, which were a key part of Gov. Brian Kemp’s campaign.
Kemp originally proposed a $5,000 raise for all teachers. It appears the Legislature will fund $3,000 this year — 60 percent of the governor’s goal — and revisit the issue in later years. While no state money was allocated for other staff, state lawmakers urged districts to find that money locally.
Fulton School’s budget for FY20 includes the state recommendation for teachers along with a mid-year step for eligible staff; a 3 percent salary increase and mid-year step for non-teaching staff (paraprofessionals, clinic aids, bus drivers, food service, etc.); and a 2 percent raise and mid-year step for all other positions.
Ron Wade, director of Talent Management for Fulton Schools, said a competitive salary is the key to attracting and retaining top employees, and Fulton has a history of making that a priority.
“The Fulton School Board has made a consistent commitment and effort over the last 10 years of positively impacting the earnings of our employees,” Wade said. He noted even during the recession when many districts were furloughing staff, Fulton offered one-time bonuses to employees.