Hoover school board weighs $238 million budget for fiscal 2023
Hoover school officials on Thursday proposed to spend $238 million in fiscal 2023 — a 4% increase from the 2022 budget of $229 million approved a year ago.
Revenues are projected to be $220 million, which is about the same as final projections for fiscal 2022, Chief Financial Officer Michele McCay said. With an additional $645,384 coming from other sources, that would put overall expenditures $17.4 million more than revenues for fiscal 2023.
However, McCay noted that the district proposes to spend $34.2 million on capital projects in 2023, including $15.4 million for a new theater at Hoover High, $4.5 million for a classroom addition at Bluff Park Elementary, $2.25 million for athletic field upgrades at Berry and Bumpus middle schools, $1.6 million for a transportation building addition and more than $1 million for a theater upgrade at Spain Park High.
School officials expect to finish fiscal 2022 at the end of this month with $121.6 million in the district’s overall fund balance, so the $17.4 million shortfall would leave the district with $104 million at the end of 2023.
McCay also noted that about $3.6 million in state funds were received late in fiscal 2022 and meant to be spent in fiscal 2023, so that throws the numbers off some. Also, about $3.9 million worth of capital projects originally were targeted for 2022 and were delayed, so those funds and expenses will carry over to 2023, she said.
McCay said she and bondholders like for the school district to keep about five months’ worth of operating expenses on hand, which now would amount to about $73.5 million. And she expects to end fiscal 2023 with $95 million in the general fund — enough to cover 6.5 months of expenses.
ENROLLMENT SWINGS
One item worth noting is that Hoover City Schools will receive state funding for fewer teachers in 2023 because of a decline in enrollment from 13,866 students in the fall of 2019 to 13,430 students in the fall of 2020 and 13,299 in the fall of 2021. That means Hoover lost funding for 28 teachers for the enrollment decline two years ago and lost six teachers, one librarian and two other employees with educational certificates for the enrollment decline last year, records show. The Legislature last year provided stable funding for teachers due to the COVID-19 pandemic, but that was a one-time reprieve, so the district feels the effect this year.
The system also is losing $3.2 million in funding this year for instructional support because of the enrollment decline, McCay said.
However, enrollment is on its way back up this year, with the Hoover school district gaining about 200 students, so state funding for more teachers should be restored next year, McCay said.
With state-mandated pay increases and other increases, total state funding is expected to increase from $92 million in the 2022 budget to $100 million in 2023. Federal funding is expected to decrease from $18.8 million to $12.4 million, and funding from county, city and other local sources is expected to drop from $110 million in the 2022 budget to $108 million in 2023.
More specifically, money from the 24-mill Hoover property tax fund is expected to increase slightly from the $47.2 million budgeted in 2022 to $48.3 million in 2023. Jefferson County property tax revenue for Hoover schools is expected to decline slightly from $13.6 million to $12.4 million, and Shelby County property tax revenue for Hoover schools is expected to drop from $7.3 million to $6.3 million.
The general appropriation from the city of Hoover is expected to remain at $5 million, and the general appropriation from Jefferson County is expected to remain at $1.9 million. The budget for Shelby County sales tax revenue is increasing from $1.4 million to $1.8 million.
Overall, about 48% of the Hoover school system’s funds come from local revenue sources, records show.
The Hoover school system had 1,883 employees as of Sept. 2, and 447 of those are funded with local dollars, including 223 teachers, 15.5 assistant principals, 12.5 counselors, one librarian and 197 other employees, according to the budget and McCay. Twenty-one percent of Hoover’s employees with educational certificates are funded with local dollars, representing a $21.5 million investment, she said.
Each teacher’s state funding for supplies increased from $700 to $900 for fiscal 2023, but Hoover schools received $90,000 less for fleet renewal, McCay said. Also, the state still isn’t paying total costs for transportation, supplying $75,810 for a regular school bus when a bus actually costs $40,000 more, she said.
The Hoover school system this past year operated 101 regular bus routes (including 38 single routes and 63 double routes), plus 22 special education buses (nine single and 13 double), McCay said. Hoover school buses traveled 1,190,296 miles last year, or 6,469 miles per day, which was an increase from 425 miles per day from the previous year, she said.
EXPENDITURES
About 85% of expenditures from the Hoover school system’s general fund go toward salaries and benefits. In addition to regular pay, the proposed 2023 budget would increase pay supplements from $2.66 million a year to $3.1 million a year, including $1.64 million for athletic supplements and $1.45 million for other extracurricular supplements.
Of the $164 million of proposed general fund expenditures, $129 million would go to instruction and instructional support services, $19.5 million would go toward operations and maintenance, $7.6 million would go toward auxiliary services such as transportation, $6 million would go toward general administrative services and $1.7 million would go toward other expenditures.
The Hoover school system also continues to spend a lot of money to serve special education students. The district as of Sept. 1 had 1,535 special education students, which is up from 1,079 in fiscal 2014 and 1,397 last year. Those 1,535 students represent 11.5% of the total student population, McCay said.
The district for 2023 is proposing to spend $24.3 million for special education services. McCay said it has become increasingly hard to meet federal requirements to serve special education students without adequate funding from the federal government.
The federal government 46 years ago promised to provide 40% of the costs of serving special education students, but the closest it has come to that was 18% in 2005, McCay said. Currently, the federal government is only covering 12% of the costs Hoover schools incur for special education, she said.
Since October 2019, the school system has been allocated $19 million from the federal government for COVID-19 recovery and has received and spent $16.3 million of that so far, all on instruction, McCay said. The district expects to receive another $2.7 million in fiscal 2023, which will help to continue funding academic intervention and upgrades to heating, ventilation and air conditioning systems, she said.
Hoover schools plan to spend $11.6 million on their child nutrition program in 2023 but won’t be receiving as much money from the federal government because the federal government no longer is paying 100% of the cost of food for all students this year.
This also comes at a time when food costs are escalating. The price of milk has doubled since the beginning of this school year, McCay said.
The district has 3,558 students on the free and reduced-price lunch program this year, which represents 26% of the total student population — up from 3,050 students (22.4%) last year. However, more children probably qualified for the program last year but didn’t register because all students received free lunches last year.
Other costs expected to rise for 2023 include water (a 3% increase), power (6%), custodial and maintenance supplies (17%), software (20%) and diesel fuel (35%), McCay said.
The Hoover school board plans to hold a second public hearing on the 2023 budget at 4:30 p.m. on Tuesday, Sept. 13, and is scheduled to vote on the budget at its 5:30 p.m. meeting the same day.