The early budget forecast for the Cobb County School District for fiscal year 2014 was as gloomy as the weather Wednesday during a Cobb Board of Education work session.
Cobb schools chief financial officer Brad Johnson told board members that his preliminary indications are for a $79.5 million deficit for the fiscal year that begins on July 1.
While the figure is preliminary -- state funding from the Georgia legislature and the 2013 Cobb tax digest are yet to be determined -- the long-term projections are even more grim, reaching an estimated $105 million deficit for fiscal year 2017.
After struggling to close a $62.4 million gap for the current fiscal year last May, the school board faces a more daunting challenge, and not just in terms of having a bigger hole to fill.
While estimated district expenses for fiscal year 2014 amount to $887 million, revenues come to only $807.6 million.
Johnson's forecast anticipates the district receiving $398 million in local revenue -- with $343 million coming from property taxes -- and $405 million from the state in Quality Basic Education funding.
He said some of the jump in the deficit is based on board decisions in the fall to to hire 30 new teachers and cancel one of three furlough days in the fiscal 2013 budget.
Board members expressed frustration not only by the task of straining to find new revenue, but also to identify potential new sources of income.
"This trend is troublesome," said Post 2 board member Tim Stultz of the Smyrna area. "We try to balance a budget with the hope that these revenues will be popping in . . . That's not a very good model to follow. It doesn't look like this is going to change much over the next few years."
For a time the board talked about revenue it cannot touch, including an estimated $62 million in the Cobb senior school property tax exemption, as well as continued austerity cuts from the state last year in the range of $72 million for Cobb.
The conversation reached the point where board attorney Clem Doyle mentioned that other school districts have resorted to advertising to bring in extra money, "but that more boards have probably felt it wasn't worth" the effort.
"We don't have a spending problem, but we do have a revenue problem," said board member David Banks of Post 5 in Northeast Cobb. "We have got to find new sources of revenue unless we want to go bankrupt."
Also looming over the district is the March 19 Cobb Education SPLOST IV referendum, which if approved by voters would collect $717 million in construction and maintenance funds between 2014-2018.
But the measure is drawing opposition from local Tea Party and taxpayer groups, and the chairwoman of the board's SPLOST oversight committee has predicted it will be defeated.
Before the budget presentation, the board heard from an outside auditor who gave the district's finances "a clean opinion," but suggested its $98 million in reserves -- totalling slightly more than a month's spending -- could stand to be higher.
"What we like to see typically in reserves is maybe a little closer to two months," said Adam Fraley of the Mauldin and Jenkins firm based at the Atlanta Galleria Centre. "But the county is in good financial position.
The board last year used $28 million in reserves to help balance the budget, but both Fraley and Johnson urged the board to preserve the district's financial "safety net" with "extreme care."
"We're going to have to make some interesting decisions as far as revenue is concerned," said board member Scott Sweeney of Post 6 in East Cobb. "We're still in the weeds, and we don't have a weed whacker."