Saturday, October 24, 2009

Legislators, BOE balk at Stumbo's Plan to Raid School Funds

This from the Jessamine Journal, Cartoon by Marc Murphy in C-J:

Ky. budget deficit to occupy General Assembly

House Speaker Greg Stumbo’s plan for state lawmakers to consider reaching into local school system’s contingency funds has met a bump in the road from Jessamine legislators and the local school board.

According to an article in The Louisville Courier-Journal, Stumbo has discussed his plan with Gov. Steve Beshear, who has not weighed in on with his thoughts.

State Rep. Bob Damron, D-Nicholasville, and state Sen. Tom Buford, R-Nicholasville, both agree the plan doesn’t stand much of a chance come January when the General Assembly begins its 2010 session.

“I think Greg may have been misquoted,” Damron said. “I don’t think that there’s any way that the legislature can do that.”

Damron said that each school system has reserve money set aside for different reasons.

“It’s imperative that districts keep an adequate fund balance for the issuance of bonds to provide support for the bond rating,” he said. “Other districts have money set aside for future building needs, like Jessamine County. Jessamine County has set aside some money in their surplus in order to start up a new school.”

Damron also said the legality of the state taking from the school districts would not be favorable...

This from the Ledger Independent:
'Rainy Day' robber

Dear Speaker Greg Stumbo,

Let me get this straight.

You are proposing -- or at the very least raising the possibility -- that the State of Kentucky confiscate the "Rainy Day" contingency funds of school districts throughout the Commonwealth in order to balance the state budget in 2010.

Is that right?

Taxpayer money that has been set aside for the education of our kids in school districts that have carefully managed their finances will be robbed to balance a state budget that is out of control.

Am I missing something?

You are suggesting that lawmakers in Frankfort, instead of making the tough decisions and living within the means provided to them by the working people of this state, simply declare that emergency funds set aside in school districts be seized and thrown into the bottomless pit you call state expenditures?

Come again?

I ask because a news story earlier this week quoted you as saying:"We do have a bunch of money that the schools have saved in their budgets, their 'Rainy Day' funds...and there's a pretty good sum of money there which will help us get through."The story went on to say that state officials are predicting a $161 million shortfall in the current fiscal year which ends on June 30, 2010. Officials said the outlook is even worse in the next two fiscal years.

From your standpoint, I assume that is the bad news. But there is good news as well. The story went on to say:"Tom Shelton, superintendent of the Daviess County school system, has studied the issue and estimated that the contingency funds of all districts total $300 million to $400 million."School districts are required to keep at least 2 percent of their annual expense budgets in a contingency fund and districts are actually encouraged to set aside more. Those districts who have followed the state mandate and have carefully controlled their expenses have the most to lose.

Mr. Speaker, these are very difficult economic times. Businesses small and large across this state and across this nation have been forced to make tough decisions. Good employees have been terminated, plants have been consolidated or closed.

Management and workers have taken salary reductions and seen benefits reduced.

We expect -- in fact we demand -- that state government face reality and reduce its size and its presence. Get a realistic projection of the funding you expect to have and then create from scratch a budget that will match that number.

It will not be easy. There will be pain both in Frankfort and in every community that has a state government office. Fewer state employees will be asked to do more work. Benefits -- including 30-year-and-out retirements, double dipping and generous medical benefits will need to be reduced.This is what you have been hired to do, so do it.

Rob the rainy day funds of local school districts so you are not forced to make these tough decisions and put off the Reckoning Day for another year?

That's a coward's approach.
This from the News Enterprise:

Superintendents oppose using contingencies for state

HARDIN COUNTY — Local superintendents have expressed concern over a state budget fix that was suggested this past week, and local legislators have mixed feelings about the idea.

Nannette Johnston, superintendent of Hardin County Schools, and Gary French, interim superintendent of Elizabethtown Independent Schools, both opposed the idea of taking money from school district contingency funds that House Speaker Greg Stumbo, D-Prestonsburg, publicly proposed last weekend.

Stumbo said legislators might consider using some of the money set aside in district contingency funds, which is money all districts are required to set aside in case of emergencies and for use on special projects, as a way to help balance the upcoming biennium budget.

Districts are required to have at least 2 percent of their total budget in the contingency fund.

French said EIS has been very conservative with spending to build a solid contingency fund, which he said the district has for large, expensive purchases it must make.

“I would hate to see those sacrifices we’ve made” not serve the district, he said.

EIS’ contingency fund contains about $2.7 million...

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