BROOKSVILLE — The Hernando School District's budget picture is bleak, but not ugly to enough to increase the property tax rate in a county struggling to recover from a recession, School Board members agreed Tuesday.
Despite a strong recommendation from Superintendent Bryan Blavatt to do so, all five board members said they are not ready to boost the tax rate by 25 cents for every $1,000 of taxable property value to help the operating fund for the 2010-11 fiscal year.
"I can't imagine doing that right now," said board member John Sweeney during the board's first budget workshop. "We have to do everything we can before we ask for money from people who don't have it."
"Our people can't afford more taxes," board member Sandra Nicholson. "You can't get blood from a turnip."
But all five board members did say they are a willing to put a referendum on the ballot in November to ask voters to tax themselves an additional quarter mill for the 2011-12 and 2012-13 fiscal years. The district must notify the elections supervisor by Aug. 24 to include the question on the ballot.
While most of the school tax rate is set by the state, the Legislature last year gave school boards the power to levy the additional quarter mill for critical operating needs. The move requires a super majority vote, and Hernando was not among the 44 of 67 districts that approved the increase.
This is the last year that school boards have that option. After that, voters must approve the added levy.
The district's projected general fund is $170 million, down about $2.8 million from last year. The additional millage would bring in an estimated $2.2 million annually.
Blavatt said the district will be hard-pressed to maintain staffing levels.
"Eighty-six percent of our budget is in people,'' he said. "You can cut the 14 percent that's left and you're still not going to be able to make too much of an impact on the deficit that's going to be there. I think we're almost obligated, no matter how painful it is, to generate the revenue.''
Board member Dianne Bonfield indicated she's ready to make the tough decisions the board has shied away from in the past, such as reducing the number of assessment teachers and reading coaches and shifting those staffers to classroom teaching positions.
"We are going to have to do business differently," she said.
Next year's total school tax rate is projected to be 7.31 mills, lower than this year's rate. Most of that is set by the state; the district already has hit the limit for its discretionary amount.
For a $125,000 home with a $25,000 homestead exemption, that would mean a tax bill of $731, or $756 with the extra quarter mill. With the quarter mill, the tax bill on that example home would be $8.70 more than last year's tax bill of $747.
That bolsters the argument to go ahead with the levy, the local teacher union leader told the board.
Joe Vitalo, president of the Hernando Classroom Teachers Association, agreed that lawmakers are shifting the tax burden to local school boards by not adequately funding education. Refusing to accept that responsibility to prove a point, however, would be a mistake, Vitalo said.
"We're sending a message to Tallahassee, but it's going to be on the backs of our kids," he said.
The district has lost about $16.6 million in state education funds in the last three years and expects a decrease again this year, chief financial officer Desiree Henegar told the board.
Also, Hernando property values have plummeted some 12 percent, according to the property appraiser's most recent estimate. That's twice as much as the state estimated and translates to a loss in local revenue of about $8 million, dropping total local tax revenue to $51 million. And Hernando's nearly $15 million share of federal stimulus dollars runs out next year.
Meanwhile, the state has heaped more responsibilities on district such as the new student accountability and intervention systems, and career and virtual academies. Class size requirements also have been costly and could be more so if voters decide not to approve an easing of the mandates this fall.
While the district has $3.5 million for operating costs for the new Weeki Wachee High School opening in the fall, no money is set aside for the following year.
Costs largely out of the district's control, such as property and health insurance, Social Security and retirement contributions, continue to rise.
"Can we cut more? Yes. Is it going to hurt? Yes," Nicholson said. "Everyone's going to have to start biting the bullet to keep the programs."
Board member James Yant said the district needs to get more creative on the revenue side, such as offering advertising on school buses.
There could be a wrinkle in the plan to let voters decide to tax themselves. The way the statute is written, school boards must use the referendum to ask voters to "continue" the quarter mill levy, board attorney Paul Carland told the board.
There is still some question about whether that means the board needs to vote to levy the quarter mill this year to put the matter to a referendum for future years, Carland said.
"It doesn't seem logical that you could continue something you haven't started," Carland said.
The board's first public hearing on the budget is slated for July 27.
Tony Marrero can be reached at (352) 848-1431 or [email protected]