anticipated state cuts

Last in a series

Staff Writer

Underestimating the revenue it receives is helping the City of Union successfully weather cuts in state funding.

The ongoing recession has caused a drop in state revenues, creating a budget deficit. By law, the state must have a balanced budget so state funding has been slashed twice over the past four months. There was a 3 percent across-the-board cut in August, targeted cuts in October and another is expected soon.

Finance director Walker Gallman said the state allocated an estimated $302,000 to the city for 2008-2009 through its Aid to Subdivisions program. The initial 3 percent cut reduced the city's funding by approximately $9,000. Gallman said he has not received any official notification about how much the next cut will be. However, he said that based on the information he's been able to glean to date, it could be another $8,000-$9,000.

Gallman said this has not had an adverse impact on the city because of its practice of underestimating the revenue it will receive during the fiscal year. He said in preparing the 2008-2009 municipal budget, he estimated only $286,360 in Aid to Subdivision funding.

“We never budget the full amount; we never estimate the revenue at its full value,” he said. “This cut won't affect the city because we've already built this loss into the budget.”

Union County

Even though its aid to subdivisions allocation has been slashed by just over $120,000, Union County's ability to deliver its budgeted services has not been affected, according to Supervisor Donnie Betenbaugh.

The county was originally scheduled to receive $1,843,745 but this has since been cut to $1,723,080. Betenbaugh said the county has not had to make any cuts of its own so far, but is closely monitoring the situation.

School District

The Union County School District has been the local agency most impacted by the cuts which are projected to total $800,000 or 2.6 percent of its 2008-2009 budget. The district receives $23 million of its $30 million budget from the state with the rest coming from local and federal sources.

Finance director Lynn Lawson reported in November that reductions in expenditures will enable the district to balance the cuts in state funding without impacting educational programs. The reductions are mainly due to lower personnel costs resulting from the retirement of teachers and other district employees. Ninety percent of the district's expenses are personnel-related including salaries and benefits.

Lawson said the district is prepared for the worst possible scenario for this year and has been closely monitoring its spending and saving money wherever it could. He said that next year, however, the district will look even more closely at its spending to try and avoid making any cuts in services if there are further reductions in state funding.

“Whatever we sacrifice our number one priority is to service the students in the classroom,” he said. “The things that would be sacrificed first would be the things that have the least effect on classroom instruction.”

Carlisle

The reduction in its Aid to Subdivision allocation will not adversely affect Carlisle, administrator Shannon McBride said. Carlisle was originally slated to receive $17,087 but this was cut by $1,109 to $15,979. Mrs. McBride said that while unfortunate, the reduction will not require the town to cut its budget or scale back public services.