CLEVELAND, Tenn. - Significant shortfalls in local property and sales tax revenues have forced Cleveland City Schools to wrestle with "painful" reductions, including shelving the possibility of a general salary increase, in its 2014-15 budget.
"When I started looking at revenues, I saw that we weren't even at the point we were last year, let alone where growth would suggest [we should be]," said Brenda Carson, business manager for Cleveland City Schools. "This was the hardest budget I've ever worked on."
In a recent meeting, the Cleveland Board of Education voted 7-0 to approve the allocation of $396,892 from its general fund in the current budget to make up for the revenue shortages.
The shortfalls and discouraging tax revenues also mean a 10 percent across-the-board cut to expenditures in the next budget, Carson said.
"Each school, each supervisor's budget is cut by 10 percent to get us back in balance with the revenues we have," she said. "Hopefully, we're all wrong and the revenues will turn around."
In addition to those cuts, across-the-board salary increases have had to be taken off the table for 2014-15, according to the new budget.
No overall salary increases will be implemented in the 2014-15 budget due to the combination of tax revenue shortfalls and the cut of a 2 percent raise for teachers from the state budget, said Dr. Martin Ringstaff, director of Cleveland City Schools.
However, step increases will be available for qualifying employees and cuts will not be made in personnel, according to the 2014-15 budget documentation.
The problem of projected revenues falling short is occurring across the state, Ringstaff said.
When Gov. Bill Haslam took the proposed 2 percent teacher raise out of the state budget, that was a message that tax revenues were in trouble throughout Tennessee, he said.
"This has been a very bad year," Ringstaff said. "We've had a lot of painful discussions and interesting brainstorming issues on how to get this to balance."
As of March 31, property tax receipts were $144,925 below actual receipts at the same point last year, according to a memo Ringstaff issued to school board members.
February sales tax collections, which reflect December sales tax revenues, were down $12,839 from last year, according to the memo.
There are no clear answers as to why the revenue shortfalls have occurred, said Carson, citing discussions with local city and county revenue officials.
Paul Leach is based in Cleveland. Email him at firstname.lastname@example.org.