"We're not sure how these cuts will affect the resource centers," said Dear. "We do have some flexibility in our budget that will allow us to absorb most of the 2.5 percent, but the information we received today could change some of that. We do know the cuts do not affect our SEEK (Support Education Excellent in Kentucky) money." SEEK funds are the primary contributions made by state government to local school systems.
Dear said the system will lose $20,774 in state funds because of the cut.
"That's funding we had budgeted for this year, and obviously if we don't have that money coming from the state, it will have to come from somewhere else," he said.
That brought Dear to the draft budget, which is a starting point for the budget that must be submitted to the state in May.
"Based on revenue and SEEK projections provided by the state, we've come up with a budget that basically provides for no growth next year," said Dear. "It allows for no increases in spending for services, other than state-mandated raises for staff, and the state has advised us to temporarily plan for a 2 percent raise."
Next year, school systems will be required by a new law to match raises for staff to raises given to state employees.
"We have to factor those raises in, but we have allowed for no expense increases in transportation or anything like that," said Dear. "We're also not factoring in any increases in tax revenues for next year."
Dear said Boyle County is actually projected to receive more SEEK funding next year, but the figure is misleading.
"We're projected to receive more funding for special education programs because our number of special ed students has increased," he said. "But the amount we'll receive for other programs is projected to decline. Anything that is not a special education program will actually receive less money from the state."
Dear emphasized that the draft budget will probably be changed. "This is very tentative," he said. "Many variables in this budget could change before our final budget is completed. For instance, I've talked with several other systems, and they've told me their workman's compensation insurance rates doubled for next year. If that happens to us, and I expect it will increase, our rates could go from the present $75,000 premium to $150,000. That would have a huge impact."
Dear said figures will become firmer if and when the General Assembly adopts a state budget during its current session.
The school system took the first step to adopt what Dear called a cost-cutting measure by hearing first reading of a policy mandating direct deposit for employees. Dear said the step, which has been mandatory for new hires for three years, would eliminate a large chunk of the paperwork required to pay employees.
"Currently, we have about 75 percent of our employees who use direct deposit," he said. "Every pay period, twice a month, we have to do the paperwork for direct deposit recipients plus the paperwork for those who receive checks. Then we have to deliver all that paper, and going to direct deposit systemwide would eliminate a lot of work and expense."
Dear said a provision will be made for employees who insist on checks rather than direct deposit. "The banks we've talked with have told us they could create a holding account for employees who don't want the direct deposit," he said. "At no cost to the employees, they could simply go to the bank and get their paycheck rather than from us. It would still have the intended effect for the school system."
Board Chairman Preston Miles recommended that staff opinions on the policy revision be solicited prior to the February board meeting, and if the reaction is positive, the board will adopt the measure.