EDITOR'S NOTE: This story has been modified from its original version in print and online to add the correct amount of time the fund balance would provide emergency operating cash.
ARLINGTON -- School district officials Thursday night proposed a $387.5 million budget for the next school year that reflects nearly $20 million in cuts but also restores several teacher positions in struggling schools.
The school board is considering a proposed tax rate of $1.306 per $100 of assessed property value, with the debt-service portion reduced by 3 cents. Staff recommended the cut because the district expects to receive additional state funding to help cover payments on bond projects. The operations tax rate would be unchanged.
The proposal would reduce the annual tax bill on a $115,000 home -- the average home value in the district -- by $33 next year. The board is set to approve a final tax rate and budget Aug. 18.
The district spent the spring slashing its budget and workforce by 631 jobs in anticipation of a $55 million loss in state funding over the next two years. Officials were relieved to learn recently that the cutback would be only about half that amount.
Among other good financial news, property values are higher than expected, and personnel costs dropped because more teachers retired and resigned.
The cuts and added revenue have all but wiped out a budget deficit that had dogged the district for years.
The proposal adds 16 jobs -- 12 teachers, two assistant principals and two academic deans -- to enhance math and science programs at schools recently rated academically unacceptable by the state.
The proposal does not include pay raises.
"We're going to serve the needs of the students," Superintendent Jerry McCullough said. "We're going to move forward 100 percent; we're just going to do it with less money."
The district will also get a financial bump from adjusting its fiscal calendar. The 2011-12 fiscal year will be only 10 months, setting up fiscal years to start July 1 instead of Sept. 1. The change means the district will receive 12 months of funding to pay for just 10 months of expenses.
It will give a one-time boost of $32.9 million to the fund balance, or reserve, Associate Superintendent Cindy Powell said. She cited other operational benefits as well.
"It lines up our fiscal year better with our school year, which is our normal business cycle," said Powell, the district's top finance official. "It will allow us to have budgets and compensation already determined at the time teachers and other staff come back on duty from summer. That has always been a concern."
To provide apples-to-apples comparisons with the current and previous budget years, the staff has extrapolated a 12-month version of the 10-month budget. Under a 12-month fiscal year, the proposed budget would have been $424.6 million -- an $18.7 million or 5 percent reduction from the 2010-11 budget of $443.3 million.
The general fund started this year with a projected $13.4 million shortfall but is now expected to end the year Aug. 31 less than $600,000 in the red. The 2011-12 budget is projected to end with an $8 million surplus.
With the calendar boost next year, the fund balance would swell to $114.8 million, providing 13 weeks of emergency operating cash.
Many residents have called for the district to dip deeply into the reserves -- and its $21 million fund from natural gas leases -- to avoid cutting jobs and programs. But school officials have held firm, saying that increasing recurring costs would drain the district's financial cushion in a few years without a drastic increase in revenue.
Of the 631 jobs cut, 526 are from the general operating budget, including 201 teacher positions that will be eliminated through attrition. The remaining jobs were lost because of cuts in state and federal grant funding. Those included cutbacks in the pre-kindergarten and special-education programs.
Remaining teachers will pick up the slack by taking on an extra class and giving up a conference period every other school day.
"We're a lot leaner than we were, and we're asking a whole lot more of our teachers," board President Peter Baron said. "We really need parental involvement."