LPSB adopts slashed budget amid gloomy forecast

The Lafourche Parish School Board unanimously adopted its 2012 fiscal year budget, a $150 million spending plan that shows the district reeling from state retirement system rate increases and unfunded state mandates cast against a backdrop of continuous state funding cuts.

The burgeoning strain on the school board’s budget reached unprecedented territory in the new fiscal year, provoking the termination of five certified teachers.

“I just spoke to my executive secretary, she’s been in the personnel department for over 20 years, and she doesn’t recollect any time we’ve ever laid off certified teachers,” said Louis Voiron, supervisor of personnel and administration with the school board.

The board enacted in April its reduction in force and began the process of eliminating 67 teaching positions. More than 100 teachers, some certified, some paraprofessionals and some retirees hired to fill a need during a critical shortage, were placed on the displaced list. Fifteen were terminated last month, Voiron said.

Of the 15, Voiron said six were retirees, four didn’t meet certification renewal requirements and “were going to be let go anyway,” and five were certified. Of the certified instructors, three were offered positions outside of their certification, he added.

One year ago, 23 teachers were laid off. Thirteen failed to meet certification requirements and 10 were paraprofessionals.

The sobering reality that certified teachers were released from the system is a product of a year in which the school board couldn’t compensate for the ever-increasing cuts in revenue.

The school board’s newly adopted budget projects a 7 percent cut in 2012 spending compared to last year. The greatest change from the 2011 revenue stream is a $7.8 million cut from federal grants due to the federal stimulus program expiration.

But Lafourche Schools Business Manager Don Gaudet, and some on the board, lamented the state for freezing the Minimum Foundation Program growth factor three years ago, a de facto budget cut, and slicing $6.1 million in grant funding since 2009 while maintaining the position that mandated programs must continue, and be funded by the district.

“In the past, if they stopped funding it, then they said, ‘You don’t have to do it,'” Gaudet said. “Now, they stop funding it and they say we have to do it.”

In total, state support to Lafourche public schools has dropped by $12.7 million, or 15.6 percent, since the 2009 fiscal year.

The political climate will prevent more federal or state dollars being doled out in the future, board member Ronald Pere, Dist. 8, said.

“We better flatter our locals as much as we can because that’s the only way we’re going to be able to keep up the services we have,” Pere said. “Some kind of way, go to our local people and say, ‘We need another cent or we need to increase property taxes if we’re going to keep what we have.’ You’re worried about it, and I am too, and I don’t see any relief.”

The board is also wary of the manner in which the state has revoked grants after a local jurisdiction has spent the money. Superintendent Jo Ann Matthews said the state urged the board to spend grant money in one case, only to scrap reimbursement and ask for repayment later.

Coupled with the looming threat of mid-year state budget cuts, Gaudet and the board were leery of the future.

“(Student Accountability Supervisor) Mrs. (Julie) Bourgeois is working on some solutions that will allow us to reach more children with fewer employees,” Gaudet said of her work on Internet instruction. “That’s going to help, but can it stave off a 5 percent cut? Or what’s going to happen if we have to give back money we’ve committed? I don’t want to scare y’all or anything, but…”

“A spade is a spade,” Matthews said.

Revenue

The budget projects $147.3 million in total revenue, down $10.8 million, or 7 percent, from the 2011 fiscal year. The bulk of the stream is grant funded, with a 60-40 split between state-and-federal monies and the local tax, royalty and miscellaneous stream.

A projected $1.8 million increase in local taxes and $360,000 increase in royalty revenue is dwarfed by a $12.9 million cutback in state and federal monies.

Of the $12.9 million drawback, $1.2 million is a decrease in the state’s MFP and $7.8 million is in federal grant funds. The remainder is non-MFP state funding cuts.

MFP funding to Lafourche has been cut by nearly $6 million since the 2009 fiscal year, and other state funding sources have dropped by $7 million over the same span. Federal funding, after a spike in 2010 and 2011, is up $3.5 million, or 22 percent, from 2009.

MFP is enrollment-based funding. The state Department of Education awards a base amount of $3,855 per student, a figure that increased by 2.75 percent annually until 2009, when it was frozen due to state budget woes.

Lafourche reported a 191-student reduction in MFP-counted enrollment from 2010-11 to 2011-12. An official headcount will be conducted in October.

The Lafourche School Board revenue stream peaked in 2009 at $158.4 million. It was $158.1 million in 2011.

Expenditures

The school board projects to spend $150 million, down $11.4 million, or 7 percent, from last year.

The bulk of expenses are due in the form of salaries, which are down 7 percent to $80 million.

Benefits, which total $30 million, did not see a proportional decline because rates the board must pay into retirement systems increased.

The Teachers’ Retirement System rate is set to increase from 20.2 percent to 23.7 percent, and the School Employees’ Retirement System rate will jump from 24.3 percent to 28.6 percent, said Lafourche Schools Business Manager Don Gaudet.

Member and employer contributions and investment returns pay into the state’s retirement systems.

The systems’ unfunded accrued liability, essentially bond payments the system must pay within 30 years of activation to cover employees’ future retirement, has increased almost two-fold since the 2010 fiscal year.

Gaudet attributed the increases to poor investment returns. “Investment earnings have been relatively low for the last few years so that the employer rate has had to be increased to make up the difference,” he said in April.

This left the school board with a $5 million projected budget deficit in April, and provoked the board to eliminate 67 teaching positions.

On the surface, the budget shows $2.7 million deficit, but Gaudet said that is not accurate.

Money will be dedicated from restricted funds to cover expenses according to a formula, and the actual deficit is between $20,000 and $30,000, a manageable amount, he said.