Albemarle County Public Schools staff members on Wednesday told a joint meeting of the School Board and Board of Supervisors that the division faces significant revenue shortfalls over the next five years.
Assistant Superintendent Matt Haas showed the revenue numbers in a presentation to the boards about the division’s five-year financial plan.
If the division decides not to fund any enrollment growth initiatives, the schools expect to face a $2.3 million revenue shortfall in fiscal year 2017-18.
“We will need to look at current levels of service, and looking into the first year, we will need additional revenues just to hold the current level of service,” Haas said.
That shortfall accounts for a 2-percent salary increase for division staff, as well as mandatory increases to health care costs and Virginia Retirement System and Group Life Insurance contributions.
With division growth and new initiatives factored in, the gap climbs to $5.66 million next year, documents showed.
The additional $3.3 million gap is made up of a $1.7 million initiative to increase equity of opportunity within the division and $1.6 million to support growth of the division.
“The role of public schools is to be the equalizer,” Haas said. “All of our students come to us with different needs and advantages, and our role is to erase those disadvantages for our students.”
In FY2022, the final year of the five-year forecast period, the division expects a gap of more than $18.5 million.
School division documents showed that the 2-percent increase and health care costs together are expected to increase by $4 million next year, and the VRS increase is projected to be $1.6 million.
The schools are expecting to lose $500,000 of state support next year, the report showed, and see an increase of $3.8 million from local sources.
County Executive Tom Foley told the two boards that estimates had changed since the report was published, and new local revenue projection is likely to be closer to $4.5 million.
The final adopted schools budget of $172,672,938 is about $1.5 million shy of the School Board’s $174,163,445 funding request. In FY2015, the difference between the request and the adopted budget was about $3.8 million. FY2011 carried a $2.3 million separation between the request and the adopted budget.
In fiscal years 2012, 2013 and 2014, there was not a difference of more than $470,000 between the requested and adopted budget. FY2016 saw the adopted budget grow by $135,000 over the request.
School Board members Steve Koleszar and Jason Buyaki in interviews Tuesday had different approaches to closing the gap.
Koleszar said the onus is on the state to restore funds to education and that the school board’s job is to present the division’s fiscal needs, not a balanced spending plan.
“We have a tremendous failing at the state level of providing funding for public education,” he said. “The Board of Supervisors has been supportive of us and will continue to be. I just feel like the state needs to step up and do its job.”
During Wednesday’s meeting, School Board Chairwoman Kate Acuff said reduced state revenues are a serious strain.
“Since 2008, the decrease in per-pupil state funding has amounted to about $60 million, which would have more than covered all of our revenue gaps since then,” she said. “This year, the funding is about $400 less per student than in 2008, which, over a 13,500-student division, is about $6.5 million.”
Jason Buyaki argued for belt-tightening and an increase in the number of students in each division classroom. Last year, Buyaki called the idea of adding children to classrooms a “non-starter.”
“My thinking on it has changed since 2015,” he said in an interview Tuesday. “We have strong teachers and strong curriculum, [but] if the revenue coming isn’t where it needs to be, we need to tighten our belts a little bit.”
Neither Koleszar nor Buyaki would directly back adjusting the county’s established ratio of 60 percent of new revenues being funneled to the schools. Buyaki said he is comfortable with the arrangement, while Koleszar reiterated that the burden should be on the state. County general government and the school division prepare their budgets using the 60-40 guideline.
“I am going to continue to advocate for more funding for education, but I don’t have to make a budget-balancing decision,” Koleszar said.
Instead of messing with the split with the school division, Buyaki said he would like to revisit the long-standing revenue-sharing agreement between Charlottesville and Albemarle County.
“Myself, I would like to see the county negotiate with the city on the revenue-sharing agreement because that is county tax dollars just going to the city,” he said. “The 60-40 split works well for us. I think it is a fair arrangement.”
Assistant County Executive Lee Catlin said the county’s two-year financial plan has been balanced on splitting revenues 60-40 with the school division. Changing that ratio would fall to the Board of Supervisors, she said.
“We start with the 60-40 as a planning tool to get the conversation going,” she said Tuesday. “Beyond that, the Board of Supervisors has the ability to look at needs and decide what to do.”
The revenue-sharing agreement, adopted in 1982, is a contract between Charlottesville and Albemarle County where the county makes yearly payments to the city in exchange for the city being prohibited from annexing county land.
In 2016, the county paid $15.7 million to the city per the agreement.
The Virginia General Assembly has maintained a moratorium on annexations since the 1980s but Albemarle cannot exit the revenue-sharing agreement without the city’s consent or upon consolidation, where the city would become a town within Albemarle.
Next year’s general schools budget revenues will not be affected by proceeds from a county bond referendum to fund school projects. The referendum passed Tuesday with more than 70 percent of county voters in favor.