New Albany-Floyd County school officials already are fearful of the 2008 budget year, even as they held a public hearing on a 2007 budget four months away from its first day.

The school corporation’s 2007 budget totals $107 million, a 3.7-percent increase from the current fiscal year, business director Fred McWhorter told trustees on Thursday.

The estimated tax-rate increase is $1.54, he said. The 2006 tax rate is $1.68; the rate is determined through a state formula.

Trustees are expected to vote on the budget on Sept. 18. The budget would be sent to the Indiana Department for Local Government Finance, which will approve a version in early 2007.

“There’s no doubt we’re going to get through the ‘07 budget in fine fashion,” Deputy Superintendent Brad Snyder told trustees.

In ‘08, perhaps not.

No community members spoke on the budget during the public hearing.

The 2007 budget proposal increases funding to English as a Second Language programs by $250,000, Snyder said. The increase is part of an agreement with the Office of Civil Rights, after complaints of the school corporation’s offerings led to a call for expansion and reorganization.

Also, $150,000 was added to fund school resource officers. A grant that funded the school resource officers ends this year — the school corporation and law enforcement agencies will split the costs, Snyder said.

The budget would call for a 2-percent pay increase to teachers, according to information provided by the school corporation.

The 2007 budget forshadowed problems expected in 2008.

“I think everyone in this room realizes we have some major challenges ahead of us,” Trustees’ President Don Sakel said during the meeting.

Healthcare costs are expected to increase 12 percent, McWhorter said.

Also, fuel and energy costs are expected to increase. The recent sewer rate increase is expected to cost the school corporation $30,000, McWhorter said.

Enrollment, a major statistic used in calculating state funding, is expected to decrease in 2008.

The school corporation will in 2007 for the third straight year spend more than revenue will provide, McWhorter said.

School officials plan to use a cash balance to cover the costs.

The cash balance would suffice for 2007 — but not through 2008, McWhorter estimated.

School corporations cannot borrow to pay for operating costs, meaning New Albany-Floyd County schools probably will need to reduce costs for the 2008 fiscal year.

Ninty-one percent of the school corporation’s general fund budget is spent on salaries and employee benefits, McWhorter said.

Trustee Jim Zoeller said the school corporation would need to increase revenue or decrease costs, perhaps by reducing personnel spending because of its proportion in the budget. Trustee Rebecca Gardenour said closing a school may be necessary.

“Not everyone is going to be happy with these decisions,” she said.

• In other business, trustees delayed discussion of school board goals. Superintendent Dennis Brooks was absent because of an illness in his family.

The school corporation approved Fifth/Third Securities to act as investment banker for the Floyd Central High School renovation project.

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