An additional $4 million must be cut from the Metro schools budget this month, school board members determined Tuesday. Further cuts could be necessary in February.
Sales tax revenues are continuing to come in lower than this year’s current budget projects. Metro officials now estimate that Nashville’s public school district will come up short by between $12 million and $14 million. Millions of dollars in expenditures have already been cut, but school board members voted Tuesday to ask school administrators to create a plan for cutting an additional $4 million immediately. The board will consider the plan in two weeks.
Steve Glover, chair of the board’s finance committee, said he believes this round of cuts can be achieved without any staff reductions. The freezing of additional staff positions, combined with the cutting of expenses by as much as 10 percent in each district department, should allow $4 million to be saved immediately, Glover said.
“We will not be laying anyone off. No jobs will be lost,” Glover told board members.
But that doesn’t mean staff reductions might not be necessary in February, when the district learns the results of the holiday shopping season. Further cuts could be necessary at that time, and Glover confirmed that the option of reducing staff positions is not necessarily off the table for consideration in February.
As the economy struggles, sales tax revenues are coming in below projections with increasing severity. Sales tax revenues reach the district two months after they are collected through retail purchases, so the most serious economic troubles of this fall are only just now beginning to trickle to schools. Two-thirds of all Metro sales tax revenues are directed to schools, so the trouble is not experienced with similar severity by Metro government as a whole.
Metro Nashville Public Schools, as a district, has realized savings this school year to compensate for part of the shortfall. More than 60 vacant positions have been frozen, primarily in areas outside school classrooms. Declining gas prices may also help. School officials said Monday that they expect to save as much as $1.3 million in fuel expenditures this school year as gas prices have fallen, even though costs of diesel fuel — which powers most school buses — have not fallen as much as costs of gasoline.
Though cuts are being made, the district still has a surplus of reserve funds. Currently, MNPS has $52 million in undesignated reserve funds. Metro’s finance department has a policy specifying that a reserve balance of 5 percent of a total budget should be maintained in reserves. MNPS’s reserve balance is still well above those requirements — 5 percent of the district’s operating budget would represent about $30 million.
But about $19 million in funding for the current school year was pulled from the district’s reserve funds for recurring expenses, and Glover has said that as much as $5 million additional dollars may be used from reserve funds this year. Next year’s reliance on reserve dollars is anticipated to be even greater.