LOXLEY— After months of spending cuts, shortfalls and layoffs, the Baldwin County Board of Education approved its 2010 fiscal year budget Sept. 10, cutting an additional $1.9 million in the week leading up to the vote in order to meet Alabama’s Sept. 15 deadline.

Although the system took steps in previous months to ease financial strain, including dramatic spending cuts and layoffs of more than 400 employees, it was still faced with a multi-million-dollar budget shortfall when system financial officer Jean McCutchen made her initial presentation to the Board on Sept. 3.

To balance the final budget, retirement incentives were offered to willing employees systemwide, effective Jan. 1, 2010, fuel funding was cut by $200,000  and $184,000 was cut in extracurricular activity funding systemwide. The extracurricular cuts will affect supplies such as band uniforms and art supplies, communications director Terry Wilhite said.

Additionally, federal stimulus money will be allotted to pay some salaries in federal programs, and the system was granted Alabama Department of Education approval to use bond money for debt payments.

Submitting an unbalanced budget to the state was not an option, McCutchen said. The system’s only alternative would have been to apply for a cash-flow line of credit to make up the difference, which would have to be paid back within one year.

“It was a very aggressive move, it is an aggressive budget and it is a tight budget,” she said. “It does mean that, as the Board moves forward, at least we start the year without planning to borrow money.”

The system’s total budget for 2010 exceeds $267 million, $75 million less than last year’s budget of $342 million. All major categories within the budget took financial hits; instructional services, which makes up 52 percent of the system’s total budget, is $8 million less than in 2009. Instructional support — the next biggest portion of the budget — is almost $5 million less and auxiliary services is $4 million less.

The cause of the system’s financial strain is a combination of proration and severe shortage of incoming funds due to dropping tax revenues at the state and local levels, which comprise 87 percent of the school system’s total revenue.

At the local level, the bulk of the system’s revenue comes from county ad valorem taxes and sales taxes. In 2009, ad valorem taxes totaled $49 million — $8 million less than they were in 2008.

Sales taxes took a similar hit, dropping 8 percent from last year. In all, the system’s general fund took a $31 million financial hit.

“It has been devastating,” McCutchen said.

Baldwin County Schools were additionally saddled with a highly restricted budget, of which 79 percent is devoted to fixed salary and debt payments, leaving only 21 percent of the overall budget available for cuts. That portion was cut severely, with the Board approving the termination of more than 200 probationary employees — workers who had been with the system for less than three years — in August.

Since 2007, the system has reduced its number of locally funded certificated positions from 465, the highest in the state, to 147.   

“The schools have been severely cut … the central office budget has been cut in half, and that affects the schools because of the services we provide for them,” McCutchen said.

The system will likely have to submit an amended budget if Gov. Bob Riley declares additional proration, which McCutchen said could be expected as soon as October. If that happens, the system could have to cut an additional $6-8 million.

For now, though, school officials and teachers seemed satisfied with the balanced budget.

“I am very pleased that the Baldwin County Board of Education has passed a balanced budget,” said Delta Elementary School principal Leah Ann Overstreet. “The process of bringing the budget into balance has been devastating to our schools and our dedicated employees. However, now that we have resolved the budget issues, I am looking forward to a brighter economic future.

“In the meantime, we’ll do whatever is necessary to continue to provide quality instruction to our students.”

The unanimous budget approval vote came during the Board’s second required budget hearing, held at the Central Office Satellite in Loxley.