Clay County school budget Q&A with Director Jerry Strong

Published in print July 29, 2015

CLAY COUNTY-With the pending shut down of Clay County schools looming in early October if the system receives no additional funding and the issue reaching regional and statewide media outlets, schools director Jerry Strong continued his explanation of the financial dilemma this week with a submitted question and answer (Q&A) interview.
As widely reported over the summer by the HORIZON and now in the Herald-Citizen regional newspaper and on Nashville television newscasts, requests for additional funding to counteract the cost of federal spending mandates associated with the Affordable Care Act have been rejected by the Clay County Commission prompting the school board to vote to close schools on October 9.
“In the absence of additional funding, it is inevitable that the state and federal funding will cease in October which will result in the closing of the school system until the legal system acts to reopen schools,” Strong said in a past statement.
Until then, Strong said school will resume as normal with classes beginning next week (see related story).
“I wanted to share questions that I have been asked regarding the financial condition of the school system and my responses,” Strong explained. The following is the Q&A as it was received:
Q: You are always talking about partially unfunded mandates. What are partially unfunded mandates?
A: The state and federal governments decide and tell us how to spend the money. However, they do not furnish all of the money. Simply put, they mandate (require) we spend the money in a particular way while only furnishing part of the money, causing us to spend our local tax dollars on what they want it spent on.
Q: Why is the school system in financial trouble?
A: The immediate financial problems are all related to partially unfunded mandates from state and federal requirements. The costs of state and federal unfunded mandates have increased over $800,000 in the past 5 years. The unfunded mandate that has pushed the school budget over the edge is the expense of the Affordable Care Act, which requires us to provide health insurance for all school employees, both certified and non-certified.
Q: The school budget is approximately $ 8.5 million. What part of the budget is local money?
A: Over 75% of the school budget is provided by state and federal funding. They provide this part, but they tell us where it must be spent as well. They also tell us where a portion of the local contribution must go. The school board controls less than $3 million.
Q: Why did the school’s financial conditions happen all at once?
A: It did not happen all at once. Financial concerns for the school have been developing for many years. We have been telling everyone that would listen for the past three years that the school system was going broke.
Q: The school board closed Maple Grove School; should that not have ended financial problems for the school system?
A: At the time the school board closed Maple Grove School, mandated spending was depleting the school’s fund balance at such a rate that it would have been completely depleted within three years. Closing Maple Grove School stopped the financial bleeding. Schools could operate a few years without assistance after that school’s closing. The Affordable Care Act started the financial destruction again.
Q: What measures have been taken by the school board to become more efficient?
A: The school board has cut more than $700,000, including closing Maple Grove School, from the school budget in the past three years. That $700,000 reflects over a third of the budget the school board controls. This past week the school board made additional cuts of another $160,000 bringing the total of budget cuts over the past three years to $860,000.
Q: How do you respond when you are told that the people of Clay County cannot afford any more taxes?
A: I agree that taxes are high. Ashley White, finance director for Clay County Schools, and I have given presentations to numerous groups over the past three years with the simple message that partially unfunded state and federal mandates are destroying the finances of our school system because of Clay County’s inability to generate the revenue needed.
Q: Initially the school board approved a request for the equivalent of a thirty cent tax increase to be placed on the wheel tax. When that was rejected by the commission, the school board asked for a twenty cent increase on the property tax, and to absorb the previously requested additional ten cents. Many believe the school board did not need the ten cents to begin with. Isn’t the school board being “wishy washy”?
A: No. The school board needed thirty cents to cover the expense of the Affordable Care Act ($315,000). After the commission’s rejection of the full amount, they compromised by asking for twenty cents. It was the board’s reluctance to request such a large increase.