Was the Vigo County School Corporation referendum necessary? We asked the superintendent

When we posted our original story about the additional $3 million on social media, many comments centered around the recently passed referendum.

Posted: Jan 23, 2020 3:32 PM
Updated: Jan 23, 2020 5:49 PM

VIGO COUNTY, Ind. (WTHI) - The Vigo County School Corporation says it has more money in its operating budget that it first thought.

Superintendent Rob Haworth says they brought this discrepancy to the attention of the Vigo County Teachers Association - and the two sides have an agreement in place.

When we posted our story on Thursday morning about the additional $3 million on social media, many comments centered around the recently passed referendum.

Specifically, does this discovery mean the referendum was no longer necessary?

LINK | VIGO COUNTY VOTERS APPROVE SCHOOL CORPORATION REFERENDUM

Haworth says the referendum is still needed. He told us the referendum isn't solely a question of the corporation's cash balance.

It has more to do with addressing deficit spending. That means spending more money than you are taking in.

The school corporation did that to the tune of $7 million last year.

"Regardless of the cash balance that you would need to use, you can see we are still deficit spending," Haworth said. "Our referenda, if people will recall, was for $7 million. The commitment was it would be a bridge."

That's where Haworth's spending cuts and revenue enhancement plan comes into play. The cuts are still on the table and could be voted on at Monday night's school board meeting.

The discovery of $3 million in additional money prompts another question - how will this not happen again? Especially in light of Chief Financial Officer Bruce Perry's departure from the school corporation last month.

Haworth said former CFO Donna Wilson has returned to help in the business office on a part-time basis.

LINK | BRUCE PERRY OUT AS CHIEF FINANCIAL OFFICER FOR THE VIGO COUNTY SCHOOL CORPORATION

"We have a business office that functions at a very high level, so I think with her, as the captain of that ship right now, we're able to continue to do our business and be comfortable in our numbers," Haworth told us.

He went on to say Wilson is reviewing the budget to see how a $3 million error happened, and also to find any outstanding bill from 2019.

So far, she's found more than $700,000 in unpaid bills. That will be taken care of at Monday's school board meeting.

DR. HAWORTH STATEMENT ON TEACHER COMPENSATION, CASH BALANCE

"Vigo County School Corporation teachers and staff are committed, passionate professionals. But our teachers, like their colleagues across the state of Indiana, often have to take on second jobs to make ends meet. Teacher pay is tied to funding from the state sales tax, and teachers across Indiana are not paid what they are truly worth. We have a teacher shortage across our state and here at home, and pay is certainly part of the problem. We must continue to find ways to improve teacher pay.

As 2019 came to an end, and as we were negotiating a contract, I was concerned that by providing retroactive pay, the cash balance would fall below $13.5 million. As we closed out the 2019 calendar year, it became evident that we could, in fact, provide retroactive pay to our teachers. In reaching out to Vigo County Teachers Association leadership, we sought to reintroduce retroactive pay. Last evening, we reached a tentative agreement that must be approved by the school board to do that, as well as improve the minimum salary of teachers with at least one year of experience.

As we close out the 2019 fiscal year, our cash balance ended at $13,031,773. If you include the Rainy Day fund, that total rises to $14,610,247.

Over the last 10 years there have been continual changes in the state statutes regulating education in order to protect the amount of property taxes assigned to the Debt Service Fund. In 2019 the VCSC qualified for the protected tax waiver in the Debt Service Fund. In essence, this would allow the school corporation to transfer these funds from the Debt Service Fund to the Operating or Education Fund. Due to the December 2019 collections, the protected tax funds arrived at $1,629,300. Originally, we projected this income to be $1.2 million. Adding the protected tax waiver funds to our cash balance makes it $16,239,547.

Tonight’s agreement with the VCTA is an estimated package of $1.1 million dollars. When combined with outstanding bills of $710,687 from the 2019 calendar year, our adjusted estimated cash balance is $14,428,861.

The Vigo County School Corporation is committed to maintaining a cash balance of 13.5 million dollars, which will protect our bond rating. A favorable bond rating is key to bringing important advancements to our schools. This week, when we discovered our adjusted estimated cash balance would be above $13.5 million, we sought to improve teacher contracts for 2019-20 because it’s quite simply the right thing to do.

Throughout our community conversations regarding the referendum, we reminded the community that we would need at least $8 million of spending cuts if the referendum did not pass. In 2019, we spent more than $7.2 million than we brought in from federal, state, and local resources, however when adjusted to include retroactive pay and 2019 outstanding bills, it exceeded the $8 million mark we spoke of in our community meetings. We are thankful for the passage of the 2019 referendum, however, as these numbers indicate, the referendum dollars must work in tandem with reduced spending to create a balanced budget.

Reducing our spending is a long-term strategy, and we must face the reality of declining enrollment. Spending cuts proposed in October 2019 will right-size our budget for our enrollment. In the meantime, we must continue to retain and attract the quality teachers we have come to expect in Vigo County, and it is my hope that revisiting 2019-20 compensation in light of a better-than-projected cash balance will help meet that important goal.

Decreasing enrollment continues to be the major issue for the district. Vigo County School Corporation enrollment fell by more than 200 students in 2019-20 and the total number of school-aged children living in Vigo County fell by more than 300 students. Vigo Virtual Success Academy has been successful at slowing our enrollment decline. However, unless we see a change in the state funding formula, our projected increase in “new” money for 2021 will once again be less than 2%."

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