NORMAN — Tax-cutting legislation and sequestration could spell a deficit of up to $2.7 million in Norman Public Schools’ 2014 budget, according to a presentation at Monday evening’s school board meeting.
NPS Chief Financial Officer Brenda Burkett presented her projections for Fiscal Year 2014, factoring in expected losses in tax revenue since the passage of SQ 766 in November and an anticipated reduction of 5 percent in the statewide budget from federal spending cuts.
From sequestration alone, Burkett projected NPS to see a loss of $374,808 from its current federal budget of $7.4 million.
“Cabinets have met and we’ve gone through each of our programs, evaluated what we’re spending, and we’re evaluating what will be getting the reduction, what will carry over to next year. That’s what we’re working through now,” Burkett said.
Superintendent Joe Siano cautioned against dismissing the reduction as comparatively minor.
“There’s a tendency for this discussion to be compartmentalized. Three hundred and seventy-five thousand dollars on top of a reduction of $4.5 million with 1,500 more students in four years is significant,” Siano said. “Additionally, our federal funds are targeted at our most needy students.
“When you consider how specifically targeted these funds are and how strictly mandated their spending is, there are many issues affected. We’re becoming more and more limited in our options ... there are no more places to move.”
As with other difficult budget reductions, Siano said the next step will be to reprioritize program budgets, but between the district’s general fund and federal funds, flexibility is rapidly shrinking.
Burkett’s projected sequestration losses were dramatically compounded by anticipated loss in local revenue with the passage of SQ 766, exempting all intangible personal property — such as patents, trademarked software or mineral interests — from ad valorem taxation.
“With these two state questions hindering growth in local tax revenue (through exemptions), the amount the state has to distribute will go down. This is a huge reduction in local wealth, so the state will have to come up with replacement funds,” Burkett said. “There will be corporations reporting a much smaller valuation, taking advantage of intangible claims, and they’ll be paying a lot less property tax, hence the reductions in our state aid.”