LCS projecting $17.7 million budget deficit - Insurance News | InsuranceNewsNet

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January 30, 2024 Newswires
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LCS projecting $17.7 million budget deficit

News & Advance (Lynchburg, VA)

Facing both estimated increases in utility and health insurance costs and the upcoming loss of CARES funding, Lynchburg City Schools officials are grappling with a $17.7 million budget deficit, according to Superintendent Crystal Edwards preliminary fiscal year 2025 budget presentation.

With that number looming, budget conversations already have been tense between LCS administration and school board members. Edwards has a Jan. 31 deadline to give a preliminary funding request to the city for its budgeting purposes, and another budget discussion is on the board's agenda for tonight's meeting at 5 p.m. in the School Administration Building, 915 Court St.

In March, the board will host a second public hearing before adopting a preliminary budget by the end of the month. During that time, Lynchburg City Council will consider the school board's budget request and then around May will adopt a city budget with a set funding amount for the schools. Council must have a budget adopted before the end of the fiscal year, June 30.

That order of operations was a point of contention early in the School Board Finance and Facilities Committee's meeting Friday.

"When it was already in the wind that we were going to get level funding, I'm just wondering why the budget wasn't created with that in mind to begin with," board member Christian DePaul said.

Level funding means the school board would receive the same amount of money from the city as in fiscal year 2024 (currently ongoing): $37.4 million plus $1.9 million held in contingency by city council.

"... I just want to know when it was confirmed that we are getting level funding," Edwards asked. DePaul said there has been no official communication from the city to that end.

"I'm just wondering why. It comes in at $17.7 million above what we had last year for the status quo, it just doesn't make sense to me," he said.

LCS is building its budget based on Gov. Glenn Youngkin's recommended biennium budget, released Dec. 20. Assuming level funding from the city, the division is projecting $108.3 million in overall revenue. "Status quo" expenditures total $126 million, according to the division, leaving a $17.7 million deficit.

About $9.4 million of that deficit is CARES-funded programs and positions. Temporary COVID-19 relief monies, CARES funding expires this fiscal year.

The division is also expecting $2 million in higher utility costs and $4.7 million in additional health insurance costs, plus $1 million less in state revenue from the governor's proposed budget.

Administration has proposed options to close that gap, starting with $9.5 million in "division-level" cuts: 50 to 100 positions, including division-level administrators; CARES-funded programs and services including funding for LCS's virtual academy and restorative suspension center; and increasing employees' health insurance premiums among other measures. Administration is working with principals to identify another $5.2 million in "school-level" cuts spread out across all schools.

"We've got temporary money being used for fixed costs and I think the time has come where we live within our means," board chair Atul Gupta said, adding he thinks the board shouldn't pick and choose among CARES-funded programs to keep.

Edwards' recommendation to the board is to request $42 million from the city — a $3 million increase that with the $14.7 million in cuts would balance the division's operating budget. It also involves a request to city council for the $1.9 million contingency to be moved into the instruction budget separate from the $3 million increase.

"I have to cut operating positions to make this work. I am where I was in 2020 where the board said 'we don't want to do that right now, let's just use CARES funding.' We were always facing a cutting of positions," she said.

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