State and local funding make up 90 percent of Sequatchie County's school budget.
Total state and local funding: $13,933,000
• State share: 82.74 percent
• Local share: 17.26 percent
• State share: 86.35 percent
• Local share: 17.26 percent
• State share: 71.68 percent
• Local share: 28.32 percent
Total state share: $11,148,000
Total local share: $2,785,000
Source: Sequatchie County Schools
Sequatchie County school officials say a shift in state funding is the only way the district will avoid major cuts and possible job losses in fiscal year 2012-13, which starts next July.
"It's a perfect storm for Sequatchie County," Director of Schools Johnny Cordell said.
"Sequatchie is losing some state funding, the county's [state-assigned] ability to pay has gone up, local revenues are not increasing and I think our property tax evaluations have gone down, so a penny property tax brings in less than before," Cordell said.
He said the 1.6 percent raise Gov. Bill Haslam approved for teachers and school employees this year came from funding that would have gone to districts, and then districts had to match part of the raise with local money.
There is no new revenue, just a lot of money shuffling, he said.
"We got a pie out here, and since we can't increase the size of the pie, we fight over the size of the pieces," he said.
School board Chairman Charles W. Rollins said if state funding doesn't improve, the 2012-13 budget could be far worse despite school board and Sequatchie County Commission efforts.
"We're struggling; the state's not giving us enough money," Rollins said Friday. "We've lost about $400,000 in state funding ... just last year to this year."
Rollins said all rural school systems are "in the same boat" in state funding.
Lawsuits filed over state funding in the late 1980s and early 1990s by a group of more than 80 districts formerly called the Tennessee Small Schools for Equity - now dubbed the Tennessee State Schools for Equity since larger districts have joined - could be renewed if solutions can't be found, he said.
Rollins said there's still room and motivation for officials to work funding problems out.
"But if we don't see something change next year [2012-13], we'll be laying off teachers," he said.
Cordell said the situation grew out years of adjustments that never really answered funding problems for all systems.
"We hadn't really been affected that much until last year," he said, noting that an open custodial position and an open teaching position have been eliminated.
The school budget was cut by about $200,000 last year, and officials plan to cut about $400,000 in 2011-12, he said. Federal funds will be used as a one-time counter to the $400,000 cut, he said.
The district has about $10 million in reserve that was intended for a new school, but the project has been bumped to the back burner and the money cannot be used to balance the budget, he said.
"It's ironic that I can build the school, but I do not have the funds to operate it," he said.