By Stefanie Jackson – The economic impacts of the coronavirus pandemic have led Northampton County Public Schools to trim every inch of fat from its fiscal year 2021 budget, down to the “bare bones,” school board members said during a May 7 meeting.
Chief Financial Officer Brook Thomas said when the Virginia General Assembly reconvened in April, cuts were made to public education, decreasing Northampton schools’ projected state funding for FY 2021 by more than $358,000.
Northampton schools are set to receive about $595,000 in relief from the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), but Superintendent Eddie Lawrence cautioned against using one-time funding to cover recurring costs in the annual budget.
“If you think back to the Great Recession, one of the things that happened – our school divisions and public entities … used the stimulus money that came out of that for recurring costs, and then when that dried up, you still had this lag between the return of normal revenue and … all these costs.”
The CARES Act money is “really not to plug budget holes, it’s for one-time costs just from this COVID-19 pandemic,” Lawrence said.
The school division also expects loss of revenue from state sales taxes and the Virginia Lottery due to decreased spending during the pandemic.
Northampton schools originally expected nearly $1.98 million in revenue from state sales taxes.
But that expectation was “based on an economy that no longer exists in the same form,” Thomas said.
“Preliminary estimates that come from an economist that presents regularly to Virginia superintendents and school board officials is that we could be looking in the neighborhood of a 10% reduction through all of next year in sales taxes.”
Thomas proposed a revised FY 2021 budget that includes a sales tax revenue loss of 12%, or about $237,000, and a Virginia Lottery revenue loss of 1.7%, or almost $46,000.
Local funding is also at risk.
In a recent meeting with Northampton County officials, “it was implied pretty clearly that the county … does not have a balanced budget itself,” Thomas said.
“I asked the question, ‘Are you saying that we’re looking at reduced county funding for next year?’ And the answer to that was ‘yes, possibly.’”
Thomas believes level funding may be the “best case scenario” for Northampton schools next year.
The school board will not pursue an additional $992,000 in local funding for next year as planned.
It will still request nearly $43,000 to lease two school buses, which are funded separately from the school division’s annual operating budget.
Major budget cuts include the loss of 4% raises for teachers and school employees, saving about $633,000.
The proposed increase in contributions to health insurance costs for eligible employees was cut in half, from $20 per pay period to $10 per pay period.
High School Construction
Due to the economic impacts of the current health crisis, Oakley was concerned about the cost of repairs and new construction planned at Northampton High School, which also houses Northampton Middle School.
The upgraded building would allow room for growth, with space for up to 550 high school students and 450 middle school students.
A cost estimate was “almost $7 million over what the county has allocated,” Oakley said.
Northampton supervisors borrowed around $28 million for the high school project, but about $3 million is for interest and fees and about $5 million is for prep work and other costs, leaving just $20 million for construction.
But Lawrence pointed out that construction will not begin soon, and there is time to address economic issues.
“While we’re in the midst of a horrible economic crisis … I think it’s important for us all to remember that going into this, we had a very robust economy, and it will rebound.”