There are several reasons for the decline in revenues. One is the drop in average daily membership, which has dropped by 192 students. The school system conducted a study of where those students transferred. It found that about 70 enrolled in the Elizabethton City School System. About 120 transferred to adjoining counties, such as Washington or Sullivan. The school system’s decline in local revenue was also impacted by the Johnson City School System, which began receiving a share of local funds, beginning with the 2017-2018 fiscal year. These are Carter County students who reside in the corporate limits of Johnson City.
The administration plans to take $244,558.21 from the school system's fund balance to make up the deficit.
"That is not good fiscal policy to balance the budget by taking it from the fund balance because it is not sustainable," Director of Schools Kevin Ward told the members of the Carter County School Board during their meeting on Thursday.
A few hours later, at the meeting of the Budget Committee of the Carter County Commission, Ward said it was the first time the fund balance had been used to balance the budget under his watch. He added he had not requested any increases that would require an increase in property taxes.
It is estimated the budget will cause the school system’s fund balance to decline from $5,750,000 on July 1, 2018, to $5,505,441.68 on June 30, 2019.
One of the big impacts on the budget is a drop in the state Basic Education Program funds. Although the final figures are not yet available, the latest estimate shows the BEP funds will drop by $1,025,276.60.
The current estimate is that the school system will receive $29,724,000 from the Basic Education Program in 2018-2019. The county received $30,747,276.60 in 2017-2018.
Revenues received from local taxes are also projected to decline. The amount the school receives from the property tax is expected to be down by $132,810.20. The amount received from the local option sales tax is expected to decline by $93,025.
Among the cuts made were the elimination of three teaching positions through attrition.
There was some good news in the budget. It contains funding for a school resource officer for Little Milligan Elementary School. The school system will now have a resource officer at every school. Another bit of good news was that the employee health insurance premiums will rise by only 3 percent. The appropriations include $253,000 in raises and $250,000 in step increases for teachers.