Another 4 percent cut in state funding would cost the Union County School District $500,000 finance director Lynn Lawson says.

The Union County Board of School Trustees questioned Lawson Monday about reports that falling revenues may again produce another of cuts in state funding. In fiscal 2008-2009, the district lost over $2 million due to state funding cuts. Lawson told the board that while he has received no official notification, media reports indicate that another rounds of cuts is in the offing. He said the district prepared for this possibility in its 2009-2010 budget and can absorb the expected loss.

“What I’ve seen in the media is that the Budget and Control Board has confirmed a 4 percent across-the-board cut,” Lawson said. “From what I’ve seen it’s based on their tax revenue projections. We’ve not, however, received anything from the State Department of Education letting us know how that will effect our specific funding amount.

“Just in an effort to be prepared we’ve done a projection on what 4 percent of all of our state funding would be and we projected that it will be $500,000,” he said. “We expected additional budget cuts this year, it would have been unrealistic not to. Four percent this early is more and earlier than we expected, but we can absorb it. We were prepared to absorb it this time.”

The “this time” qualifier reflected Lawson’s concern that additional cuts in state funding may force the board to make the kind of difficult decisions it had to make last year. Cuts in state assistance in fiscal 2009-2010 forced the district cut out all spending that was not essential to classroom instruction. Lawson reminded the board that even with those cuts the district was still forced to use over $2 million from its fund balance to make it through to the end of the fiscal year.

“The concern that I want the board to have is while we can absorb this, if there are a couple more of this magnitude we will have some difficult decisions to make,” Lawson said. “Our fund balance is now just under $3 million which is the bare minimum for us in our operating budget.”

Trustee John Rampey asked Lawson if the district had any way to replenish the fund balance. Lawson said plans are to help replenish the fund using the $2 million in what is popularly known as stimulus funds the district will receive over the next two years.

“Part of our plan was to use Recovery and Reinvestment Act money, what most people call stimulus funds,” Lawson said. “We will receive approximately $1 million a year in 2009-2010 and 2010-2011. This is one-time funding so you don’t want to use that for recurring expenditures. We plan to use this one-time funding to replace the majority of what we had to spend in fund balance.”