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Demopolis schools bracing for proration increase

When Gov. Bob Riley released $100 million from the Rainy Day Fund to help schools cope with a struggling economy and a 9-percent proration rate, people thought that would be enough. However, last week, Riley released the remaining $116 million from the Rainy Day Fund and increased the proration rate to 11 percent.

Proration is the amount the state has to cut from the education budget due to shortfalls in the tax revenues to maintain a balanced budget.

According to figures from City Hall, the sales tax total for Demopolis for the 2008-09 fiscal year is just $15,455 less than last year’s year-to-date total, about a half of 1 percent less. Although the June 2009 sales tax figures were 3.3 percent higher than May 2009, it is 7.5 percent less than the totals for June 2008.

While smaller school systems may not be able to weather this second budget crisis in as many years, the Demopolis City Schools system will be able to hold on through the budgetary storm.

“Even though our sales tax has been dropping, the property taxes have gone up,” said Linda Agee, the chief financial officer for Demopolis City Schools. “We are so fortunate because we haven’t had to get into our reserve funds, even with this additional 2 percent.”

What complicates matters is that the state legislature passed its education budget for the 2009-10 school year back in May before the increase in proration.

“What will happen is that our budget is due in based on the budget they passed in May by Sept. 15,” Agee said. “We’ll have to do that based on their figures, and we’ll have to do a revised budget once proration is announced. Usually, our first budget revision is due in by Jan. 15.

“I’m trying to keep in mind to get my 2010 budget with these cuts in mind. Even though we may technically have the money for things, I’m cutting it right now because I’m hoping I can fill my reserves now, rather than come back to it later. There is still a possibility that we may have to dip into our reserve, but I hope it won’t come to that.”

Agee is holding the line for Demopolis City Schools in the battle against falling funds. Her goal is to provide a budget that will not cut from the classroom or force the school system to dip into its reserve fund.