LIVINGSTON — The Livingston Parish school system has declared financial exigency for a second consecutive year — and the second time in parish history.
The system faces a projected $4.6 million deficit for 2012-13, due to increased retirement contributions and a return to the budget of funds for step raises and three furlough days taken this fiscal year, Superintendent Bill Spear told the School Board on Thursday night.
“It is my duty as superintendent to put this board in a position where they may strategically look at additional cuts to balance the budget without freezing salaries, without implementing nonworking days and without laying off personnel,” he said in recommending the emergency declaration.
Prior to the meeting, Spear expressed cautious optimism about rising sales tax revenues, though he acknowledged those gains alone may not be enough to close the gap. He declined to speculate what cuts might have to be made to balance the budget but stressed the goal is to avoid any layoffs.
School Board President Malcolm Sibley agreed, saying after the meeting, “Whatever we have to do, we’re going to keep our employees. This board will see to that.”
The School Board voted 8-0 to accept Spear’s recommendation and declare financial exigency. Board member Keith Martin was absent.
After declaring the first financial exigency in the district’s history in July 2011, the School Board voted to freeze employee pay and to eliminate three noninstructional work days to help balance a $10 million deficit going into the 2011-12 school year. The two cuts accounted for about $1.7 million and $1.9 million, respectively, in savings this year, Spear said.
No other action short of laying off about 70 teachers could have saved as much, he said.
The Louisiana Federation of Teachers recently sent a letter to the district requesting the return of those three furlough days to the current year’s calendar.
Although the district intends to fight that request, Spear said it has always been the system’s goal to return both the step increases and the work days for the 2012-13 year.
Paired with an additional $1 million in state-mandated teacher retirement contributions, the return of funds leaves the system with little choice but to look for other areas to cut, Spear said.
During the past four years, increases in state-mandated retirement contributions, paired with a freeze in state Minimum Foundation Program funding, have put the squeeze on a district working to increase capacity to meet a continuous influx of students.
While the federal government injected American Recovery and Reinvestment Act stimulus funds into the school system beginning in 2009-10, the state began eliminating the 2.75 percent growth factor in MFP funding the same year.
The ARRA funds, which totaled $12.5 million to the parish over two years, have since ceased while the freeze on state funding continues, Spear said.
The 2012-13 school year will be the fourth consecutive year MFP funds have remained flat, costing the district approximately $2.5 million each year, according to system documents.
At the same time, the district’s state-mandated contribution rate to the teachers retirement system has increased from 15.5 percent in 2009-10 to 24.7 percent in 2012-13, placing an extra $12.1 million burden on the district during the four-year period, system documents show.
The district has made numerous reductions and cuts in the past two years to lessen the impact on employees, Spear said.
Starting in 2010-11, the School Board implemented a series of cost-saving measures, including freezing the hiring of paraprofessionals, central office staff and maintenance workers; freezing central office and maintenance overtime; eliminating substitute teachers for middle and high schools; and increasing student-to-teacher ratios, he said.
Even so, the district had to dip into its general fund net surplus by about $3.7 million to help balance the budget that year, according to system documents.
An estimated $11.2 million, only $4.9 million of which is unrestricted, will remain in the net surplus at the end of the current fiscal year, according to the district’s 2011-12 revised budget.
The 2010-11 cuts remained in place for this year, with the exception of hiring substitute teachers, which the School Board voted to reinstate in February 2011, Spear said.
Facing a potential $10 million shortfall for 2011-12, the board voted unanimously on Feb. 17, 2011, to declare financial exigency for the first time in the district’s history, Spear said.
In the following weeks, system officials met with various employee groups, from contract workers and staff to teachers and administrators, to gain insight on where cuts and improvements could be made, Spear said. The groups’ suggestions were helpful, and many were implemented, but a significant deficit remained, he said.
The salary freezes and furlough days were necessary to close the gap, he said.