York County SB to Learn Budget Impact Monday

By Amber Lester Kennedy Sunday, January 08, 2012

The York County School Board will get an updated look at budget projections at its meeting Monday. It will be the first glimpse at the numbers since Gov. Bob McDonnell’s biennium budget was released on Dec. 19.

Chief Finance Officer Dennis Jarrett gave the board a preview of the upcoming budget cycle in early December, noting he anticipated decreases in both state and federal dollars. He did not predict how much the division could expect from York County, but anticipates the county will be feeling the loss of revenue from the closing of Western Refining.

In his budget proposal, McDonnell called for the largest-ever contribution by employers to the Virginia Retirement System, in an effort to reduce the system’s unfunded liability. In 2010, the General Assembly balanced the state budget by approving a plan to defer payments to the VRS, with the intention of paying the borrowed money back over 10 years.

The VRS proposal will likely have a large impact on York County Schools’ budget, and Jarrett said he will explain the details at Monday’s meeting. “What I can say is that we anticipate a significant reduction in revenue and a significant increase with expenditures,” he said. Over the last three years state revenue to the division is down 20 percent; the division's operating budget is down 7.7 percent over the same period. This year's operating budget is $116.8 million, down from $124.5 million in the 2008-09 fiscal year.

In neighboring Williamsburg-James City County Schools, Assistant Superintendent of Finance & Operations Scott Burckbuchler told his school board Tuesday that the VRS increase will cost the division an additional $4.3 million. Combined with increased health care costs, decreased funding and other miscellaneous increases, that division is facing a $7.5 million shortfall for fiscal year 2013.

In his Dec. 5 presentation, Jarrett said York County schools stand to lose some state funding due to an increase in the local composite index, a score that determines a locality’s ability to pay for schools. The LCI is calculated using three factors: the true value of real property, adjusted gross income and taxable retail sales. If a locality’s LCI increases, the school division receives less state funding.

In fiscal year 2011, the General Assembly approved a “hold harmless” that delayed the regular increase of the LCI, but it is due to increase for 2013. The change will cost York more than $2.2 million in state funding, Jarrett said.

York County also receives Federal Impact Aid from the Department of Defense because many students come from military families. Jarrett is projecting an increase of $29,000 in heavily impacted funds, but noted that the federal government might consider sequestration, which would allow the government to reclaim funds originally allocated for impact aid.

If sequestration occurs, impact aid would be cut more than 7 percent, Jarrett said, adding that other federal grants, such as Title I, could be cut.

Jarrett and Superintendent Eric Williams will share their updated budget projections at the School Board meeting, starting at 6 p.m. in the East Room of York Hall. View Jarrett’s Dec. 5 presentation here.