THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, November 26, 1995 TAG: 9511250055
SECTION: VIRGINIA BEACH BEACON PAGE: 07 EDITION: FINAL
TYPE: Kaleidoscope: When Budget Numbers Don't Add Up
LENGTH: Medium: 78 lines
At the School Board meeting Tuesday, school administrators informed the board that the district may face a larger deficit for school year 1995-96 than it first thought. The Nov. 3 audit report by KPMG Peat Marwick indicated a potential deficit for this school year of $6.6 million, because the '95-'96 budget, developed last year, overanticipated revenue and underanticipated some expenses. Tuesday's report, excerpted here, emphasized that these are potential shortfalls that may not materialize, and that the school district has already taken measures to reduce expenditures over this school year by more than $7 million.
Revenues
Revenues from the State have been received in the amount of $15.97 million as basic school aid and standards of quality (SOQ) entitlements. Included within this amount was $3.1 million in state tax for the month of October. A total of $7.9 million in state sales tax has been realized since the start of the fiscal year which is approximately $345,000 less than expected for this point of the year. Also included in the $15.97 million was a final installment of $193,516 for reimbursement for remedial summer school. A total of $450,233 was received from the state for remedial summer school. A total of $1,035,185 was budgeted for remedial summer school for 1995-96 meaning that a shortfall of $584,952 will occur in that revenue category. To date, little to no federal revenue has been received. The federal government is still operating under a ``continuing resolution.'' Estimates on cuts in impact aid funding range from seven to eleven percent. More information should be forthcoming in the near future. A check for $8,276 was received for an energy conservation program conducted in the early 1980s.
The City's contribution of $12.15 million for the month of October was realized. Other local revenue is running slightly less than expected due to the fact that revenue for indirect costs-grants and revenue for drivers education have not yet been received.
Revenue Summary
Listed below are four key areas that impact the revenue stream for 1995-96. Each area is briefly discussed.
State Sales Tax
The School Board should take note that revenue from state sales tax is currently $345,048 less than expected for the payments received. If this trend continues and no growth in revenue occurs, state sales tax will realize a shortfall of $1.6 million.
Summer School Remedial
A total of $1,035,185 was budgeted for summer school as revenue to be received from the state. A total of $450,233 was received from the state, leaving a $584,952 shortfall in revenue from the state. The reasons for the shortfall relate to failure to adjust estimated revenue from the state when the state revised their reimbursement for summer school to a partial reimbursement amount (92.47 percent) and the school division revised the summer school program which resulted in fewer students attending remedial summer school classes and no adjustments were made in revenue projections.
Impact Aid/Department of Defense
While no final data or figures have been released relating to Impact Aid or Department of Defense funding, it is widely anticipated that reductions will be made in these funding areas. Reductions in these areas could range from seven percent to eleven percent or between $555,000 and $1.0 million. The National Association of Federally Impacted Schools will be meeting in late November to provide an update to the current situation.
Other Areas
While no revenue was received, the State Department of Education indicated that Adult Education monies from state and federal sources would only equal $117,628 or about $77,372 less than the $195,000 budgeted.
None of these additional reductions in revenue were factored into the Projected Deficit Reduction Plan. In fact, based on estimates in the past, a slight increase in state sales tax was forecast.
Revenue received from these areas need to be monitored continuously. If revenue from the state sales tax continues to run behind projections and if reductions in federal revenue occurs, further reductions in the budget will be necessary to prevent a deficit. by CNB