We’re talking about this story, here. Summarized:
The reserve fund for Knox County Schools is close to the state required minimum.
Called a “fund balance,” the reserve has paid for one-time projects, maintenance and year-to-year purchases such as textbooks. State rules say the fund balance should be at least three percent of the schools operating budget.
Based on that formula, the school system’s minimum reserve should be $12.8 million. Projections from Knox County show the fund will be within $500,000 of the state minimum by the end of the current fiscal year in June.
Here’s a quick rundown of the spending for the past five years in this doc: Fund Balance Appropriated Summary.
The fund balance is cash that a government or school system has on hand to spend as they wish, so long as they don’t dip below the state’s low threshold. This came too late to use for print, but here’s why, explained by an official with the State Comptroller of the Treasury:
The 3% fund balance legislation is found in Section 49-3-352, TCA. I think the intent of this 3% rule was to allow school systems, during their budgetary process, to budget (set aside) 3% of unexpended fund balance as an emergency reserve. This 3% may be expended for shortfalls in budgeted revenue and nonrecurring expenditures (capital outlay for example) with the approval of the Board of Education. If a school system does not budget this 3% fund balance reserve, their budget may not get approved by the state Department of Education or the Division of Local Finance.
That 3 percent, essentially, is the emergency fund. And Knox County Schools have spent nearly all the way to that threshold. How close they got will not be known until about August/September, when sales tax returns come back from the state. Sales tax is collected by the state then returned to the municipalities, so there’s a lag in the reporting. Sales tax also pays a good deal of the school system’s budget.
As it turns out, Knox County’s fund balance is about 40 percent of its operating fund, or $66.1 million. Don’t expect to see Tim Burchett handing that out to schools, by the way. He’s nothing if not steadfast in fiscal policy as a no-new-taxes, drop debt and save money kind of politician.
That stance has had some wondering publicly whether it’s time to relax the tight reins on county money as Knox County is in a growth phase, including schools board members and Commissioners.
Chairman Brad Anders has said that something will need to be done – he represents the exploding Hardin Valley area where a middle school was proposed by the school board and ignored by Burchett. He’s also raised concerns over the amount of roads that are paved and hopes that could be increased.
… but when it comes time to raise taxes, it’s doubtful that there’s enough will on the conservative commission – 9 of 11 are Republicans – to vote to spend the money. I’m no betting man, but unless there’s some kind of county uprising or new commissioners on the board (both doubtful) don’t expect to see the kind of widespread funding for all the things schools and everyone else wants.
If you want to take a look at more detail from the schools fund balance go to the budget detail from previous years, search for the fund balance for schools in the detail – around page 70 in the .pdf documents.