State To Schools: Prepare For Worst

BROOKSVILLE - The rumored "2 percent reduction" may come in the form of a $3.3 million cut for local schools.

Nearly a month early, Hernando County School District officials received an ominous letter from Florida's education commissioner, Eric Smith, warning districts that they should have contingencies in place to deal with an expected additional 2 percent reduction in revenue from the state.

For Hernando County, that translates to an estimated $3.3 million that the district will likely have to slice from its 2008-09 budget or the district's "rainy day fund," according to finance director Deborah Bruggink.

"The memo from the commissioner is basically saying, 'You need to prepare because (state officials) are not on track with their revenue projection,'" she said. "It's a recommendation to set aside that money, because we're not going to have it next year."

Last week, Gov. Charlie Crist told all state agencies to slash an additional 4 percent from their budgets. Traditionally, state requests to cut budgets have been followed by requests to school districts to cut about half of that.

This is in addition to a $2 million revenue shortfall that has caused major revamping of the budget's expenses.

While district officials had expected additional cuts - and alluded to the possibility during a budget workshop last week - it's now a reality, Bruggink said.

"We knew we were going to get our memo, but this is a month earlier than last year," she said. "This is an indication at an early stage of what the impact is expected to be."

The process is similar to what occurred last year, when district officials received a letter in July warning of reduced revenue. However, this is much worse, Bruggink said.

"This is pretty severe. This isn't a minor cut," she said.

The 2008-09 Florida Education Finance Program projection of state and local revenue for the district is $155.2 million.

However, with the 2 percent reduction in funding - plus new predictions that the district may not have 364 students as previously projected - the district's FEFP revenue would be $151.9 million. With the state's fourth calculation added in, officials are looking at a $3.6 million reduction, Bruggink said.

Because the district will start the 2008-09 school year with an unreserved fund balance of $3.9 million in its rainy day fund, the reduction will likely draw from both the rainy day fund and the budget.

Bruggink said potential areas for the board to begin evaluating would be additional staffing adjustments, reducing schools' discretionary dollars, utilities and all other budget expenses. Other strategies might include transferring money from the district's capital fund to its operating fund, she said.

"We may not be able to spend as much as we want because we're going to have to cut some of it," she said.

However, the final reduction will likely not be known until after the election in November, when officials are expected to have a special legislative session to reduce the state budget, which would impact education.

"We'll just have to wait and see," Bruggink said. "We might not have any adjustments until that time."

She spent Wednesday afternoon preparing information for school board members regarding the projected shortfall.