Should Pinellas dip into its "cliff reserve"?
UPDATE at 12:18 p.m.: The district's response is included at the end of this post.
The PCTA thinks so, and it's asking the district to do just that.
The district has stashed away some money in a "cliff reserve" to cushion the $38 million blow that's expected when the federal stimulus runs out at the end of the 2010-11 fiscal year. But PCTA President Kim Black said it would be better to use that money now, to stave off potential furloughs and cuts to health insurance benefits.
Last year, the PCTA asked the district to dip into the cliff reserve to help pay for a step increase in pay. The district said no. This year, with $26 million to $40 million worth of cuts on the table, and talk of furloughs still swirling, the PCTA is asking the district to dip into it to help balance the budget.
"The amount of the 'cliff' reserve, approximately $12-$14 million, will not solve the $50-plus million deficit in the school district's expected revenues in 2011-12," the union wrote in an action alert this week. "Using part of this budget line will allow for a balanced 2010-11 budget but does not change the fact that 2011-12 will be disastrous without legislative action to address Florida's revenue shortfall."
Black said it would be better to help struggling employees now and prod lawmakers for relief in the spring. To keep cutting people and programs "sends a message that we can fix this (shortfall) and budget our way out of this," she said. "It's not possible."
Superintendent Julie Janssen and the district's finance team are expected to bring more specifics about proposed budget reductions to a school board workshop Tuesday. The first of two hearings to adopt next year's budget is July 27.
UPDATE: District spokeswoman Andrea Zahn emailed this response:
The current budget model reflects a $12.2 million cliff reserve in fiscal year 2010/11. If the district chose to use this reserve to reduce the amount of budget cuts, the amount would be reduced from $26.0 million to $14.0 million; however, the required cut for the next year (2011/12) would increase from $52.5 million to $64.0 million. The use of a cliff reserve in 2010/11 allows the required cut in 2011/12 to equal the amount of the loss in funding from the Federal Stimulus and super majority .25 mill. It is the recommendation of the finance team that the 2010/11 cliff reserve be maintained. Dr. Janssen strongly supports the position of the finance team and believes it would be fiscally irresponsible to use these reserves without knowing the full extent of future revenue shortfalls.
(Image from relaxedpolitics.com)