Avoyelles School Board facing $1.6M deficit for 2018-19

They say if you are expecting a punch in the gut, you’re relieved to receive only a slap in the face. However, the next punch could be back to the gut.

The Avoyelles Parish School Board can relate to that adage after being told the expected $1 million-plus deficit at the beginning of the 2017-18 fiscal year was looking better at the end of June.

But for the third straight year, the School Board's budget is expected to end with a deficit in 2018-19, this time possibly as much as $1.6 million. It is hoping some conservative budget managing will bring the year-end figure close to being balanced.

The School Board accepted the budget report at its Aug. 7 meeting.

Finance Director Mary Bonnette said the 2017-18 budget could be closer to being balanced once all figures are in for this past fiscal year. The new fiscal year began July 1.

The figures from June showed the deficit was down from the $1.5 million feared at the beginning of the 2017-2018 budget year.

APSD Superintendent Blaine Dauzat said Bonnette and her staff's conservative planning reduced that projected deficit to less than $1 million. Now it appears that deficit will be even less after all final figures from the past budget year are in. That deficit will be covered by allocation from the board’s reserve fund.

“The last two years we have been able to overcome the budget shortfall by being very conservative,” Dauzat said. “This year (2018-19) is no exception, so we have to watch where we spend funds throughout the year.”

Bonnette said the district will collect about $53,400,389 in revenue in the 2018-19 budget but expenditures are estimated to be $53,924,288, leaving a gap of $523,899. In addition to that, there is another $1 million of district funds needed to cover other expenses in the district, leaving the anticipated $1.6 million deficit.

Bonnette is hoping her conservative approach will reduce the anticipated deficit, as it has the past two years.

If the estimated deficit for the 2018-19 budget stays at $1.6 million and the board has to dip into its accumulated reserve to cover the shortfall, the district will have less than $20.6 million in reserve. A portion of this fund balance is restricted for specific purposes. 

Bonnette noted that revenue and expenses both declined this past fiscal year.

“I think the staff continues to do an outstanding job in working with the budget,” Dauzat said. “We have trimmed over $3 million in the past couple of budgets, but the students haven’t felt the cuts. The cuts we have made we feel we can sustain.”

Dauzat praised Bonnette for her work in preparing the annual budgets.

“These final figures should be better than we budgeted at the start of the fiscal year,”  Bonnette said. She said there has been no increase in state MFP funds for several years and only a small increase in revenue from other sources this year.

“Expenses continue to rise, but with no increased revenues from the state, the continued lack of increased funding from the state along with rising expenses, it puts a strain on our general fund budget,” she noted.

The MFP is the district’s single largest revenue source at $32 million -- about 50 percent of the school system’s income.

The state has not provided the annual 2.75 percent increase in MFP revenues for the past six fiscal years.

On the revenue side for 2018-19, the board is expected to collect $3,129,077 in property taxes and another $7,937,643 in sales and use taxes.

Bonnette and Dauzat said Avoyelles Parish has one of the lowest property tax rates in the state.

“If a home is valued at $200,000, the calculations show the home owner will pay $295.25 a year in property taxes to the School Board,” Bonnette said.

The district in 2018-19 will receive about $31,974,481 from the state, $9,866,153 in federal funds and $493,023 from local/other sources.

The largest expenditure for 2018-19 is $24,868,593 for salaries. Benefits -- retirement, FICA, Medicare, medical insurance -- cost the district $15,401,469.

Purchased services, which includes contracted services, property insurance and security, totaled $8,845,330.

Supplies and debt owed by the School Board was only $4,808,899. Health insurance rates are expected to remain the same, but they have not been announced.

The board continues to monitor operations to offset increased expenses.

The annual increase in salaries and retirement contributions for school employees and teachers will cost an additional $360,000 this year.

Bonnette also noted that the district’s buildings need to be maintained and/or improved each year.