TAMPA — When Hillsborough County School Board members vote Tuesday on a $3.2 billion budget, they will do so with the knowledge that their leadership team is calling for a year of belt-tightening, and maybe two.
Reserve funds have dropped by $32 million since a year ago, superintendent Addison Davis told the board last week in a review session to prepare for Tuesday’s televised meeting.
At $118.2 million, the reserve amount meets the state threshold of 3 percent of projected revenues, but falls below the 5 percent level specified in school district policy.
In July, when it appeared the reserve had shrunk by $50 million, Davis suggested personnel costs, which make up by far the biggest portion of the budget, were the problem.
Even with the more modest loss, he said he believes the district has not adjusted spending as more families seek alternatives to district-run public schools. He also renewed his call to stop spending so much money on consultants — or, as he put it, “trying to throw spaghetti noodles at the wall” to see if they will stick.
And, as happened in July, Davis’ chief supporter on the board, Steve Cona III, called for reductions.
“Adjustments have to be made and this is, in my view, the best time to do it,” Cona said.
“You can’t continue to dip $30 million more than you’re actually bringing in. That just doesn’t make sense. If you lose students, you can’t keep the same amount of people.”
With classes only in session a week, it is too early to know for sure how many children will show up and be counted for state funding. Hillsborough uses a 20-day count to adjust class sizes and teacher assignments. Even then, there are pockets of students — farm worker families, for example — who have yet to arrive.
But, based on the early numbers, Davis said some 20,000 students are missing from the system. School leaders called their homes and learned that some are being home-schooled to avoid the coronavirus that causes COVID-19. Others have moved to private schools.
There also is a continued exodus to tax-funded, privately run charter schools. The percentage in charter schools has grown steadily over the last decade. This year, it is nearly 15 percent.
“When you lose 25,000 kids to charter schools, that money follows them,” said Michael Kemp, Davis’ new deputy superintendent, and one of several administrators he hired from his last job in Clay County.
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Like Davis, Kemp is intent on reining in spending even though doing so might be tough on morale. “There’s going to be some noise as we are trying to make the corrections,” Kemp said. “But we’re going to do what’s in the best interest of children.” Some vacancies are not being filled so the district can reduce employment through attrition as much as possible.
The district got some breathing room by opening physical schools before the end of August. As an incentive to follow his re-opening order, Secretary of Education Richard Corcoran offered to fund districts according to enrollment projections that predated the pandemic.
But Kemp said he has every expectation that the state will “true up” the enrollment and allocation numbers in January or February.
In the meantime, revenue sources that district leaders celebrated, pre-pandemic, are turning out to be less lucrative than expected.
Impact fees that developers pay for school construction are being collected at a higher rate, but the district will not see that money if home construction slows.
Shoppers are kicking in an additional half-cent sales tax, thanks to the district’s 2018 referendum for school capital needs. But spending is down statewide. In March, usually a prosperous month, Hillsborough’s $8.37 million in referendum collections were 20 percent below the $10.3 million raised in March of 2019. April’s $6.7 million was 28 percent below the $9.2 million of the year before.
The budget hearing, the second of two, begins at 5 p.m. As they vote on the budget, board members will also consider a proposed real estate tax rate of $5.97 for every $1,000 of assessed value, after homestead exemptions. That’s down from the current rate of $6.13, resulting from the overall increase in area property values.
Also Tuesday, the Pinellas County School Board will meet at 6:30 p.m. to consider a $1.62 billion budget for the coming year. In addition, board members will take a final vote on lowering the tax rate to $6.43 for every $1,000 of assessed taxable value, down from this year’s rate of $6.58.