The Charleston County School District needs to close a $6 million funding gap in its budget for the 2014-2015 school year.
Those were the school board's instructions during a meeting on Monday where the board approved the first reading of the next fiscal year's budget which begins July 1.
School Board Chairwoman Cindy Bohn Coats said after the meeting that it's the board's job to set the parameters for the budget, in terms of both funding and general policies, but not in terms of specific expenses.
"We do trust they should know how to prioritize," she said of district staff. Coats noted that the board has no intentions of raising property taxes.
Michael Bobby, chief financial officer for the school district, said a property tax increase is not included in the proposed budget. He anticipates the funding gap will be closed through a combination of cost reductions and use of the district's rainy day fund of around $42 million. The budget already includes the use of $5 million from that fund.
The revenues for the district's general operating budget are projected to come in at $401.5 million but spending is proposed to rise to $407.5 million. Revenues for the 2014-2015 school year are up $19.5 million from this school year's budget of $382 million. Projected expenses are up by $25.5 million.
The bulk of the growth in new revenue is the result of $11.5 million in new property taxes from new construction or increases in property values as well as more collections from Boeing and the expiring tax incremental financing district involving King Street.
The driving factor in the rising expenses is $11.6 million tied to employee pay. Plans for employee pay include funding for a step increase, or additional pay for an additional year of experience, at a cost of $3.1 million and the partial implementation of a new salary study at a cost of $$8.5 million that will boost pay for some employees based on market pay for similar positions in other school districts or the private sector.
The school district on Friday announced that Moody's Investor Service has increased the district's credit rating from AA1 to AA2. Bobby said the new credit rating will help the district get lower interest rates on bonds.
A public hearing on the budget will be held next Monday at 5:15 p.m. in the main board room of the school district's office at 75 Calhoun St. The board will have its second reading of the budget on June 9.