Hamilton County: Schools’ budget ‘pretty straightforward,’ CFO says

Balancing the Hamilton County Schools’ budget, which has a $20.2 million projected shortfall, is “pretty straightforward,” the district’s chief financial officer said Monday.

During a lunch meeting Monday of the local Republican Party Pachyderm Club, CFO Tommy Kranz said to erase the school system’s potential deficit, the County Commission must raise taxes or the district must cut teachers or close schools.

“I think the message is pretty straightforward,” he said.

Both Mr. Kranz and School Superintendent Jim Scales publicly have shied away from offering their own budget-balancing recommendations, but on Monday Mr. Kranz said that since more than 90 percent of the district’s $350 million budget is spent on personnel and facilities, it is mathematically impossible to make up the deficit without cutting into those two areas.

“I’m not the smartest guy around, but it seems to me when I’m trying to balance the budget and 90 percent comes from people and buildings, it doesn’t give me many options,” he said.

At first, however, Mr. Kranz, who has said his job is only to “present the facts,” avoided giving his own recommendations during his talk to the club. It took a direct inquiry from former school board candidate and anti-tax advocate Tim Price to pin him down.

“I don’t understand the mystery,” Mr. Price said. “Can you either say we need to close schools or raise taxes?”

The school board may be able to put off difficult decisions on closing schools or cutting teachers for a year, Mr. Kranz said, but he believes choices must be made soon since he projects no new revenues in the coming years.

“My revenues will be flat at best,” he said. “None of these options are the silver bullet. There isn’t one thing we can do to balance the budget, but what we may defer in 2010, we may not be able to defer in 2011.”

Hamilton County averages 513 students per building, the lowest number of any of Tennessee’s biggest school districts, Mr. Kranz also told the club. The next closest is Nashville’s Davidson County, which has an average of 541 students in each building.

With such numbers, about 80 percent of the Hamilton County’s schools are below a “financial break-even point,” he said, which costs the county about $18.5 million each year.

“If we want to continue having small schools, we need to figure out how do we change this $350 million ship midstream and continue to provide the same amount of services to students with a limited dollar,” Mr. Kranz said.