Challenge of school subject

How much is enough? How much is too much?
That’s a question the Jay School Board wrestles with regularly.
About a dozen years ago, for a variety of reasons, the Jay School Corporation found any cushion in its general fund non-existent.
Prudent business practices would require that the school system end each calendar year with a positive balance in its general fund to handle any emergency or unforeseen contingency.
But that positive balance had been seriously compromised.
Now, after more than a decade of fiscal discipline on the part of school administrators and the board, a sound year-end cash balance has been re-established.
It hasn’t been easy.
Former board members Bryan Alexander, Jay Halstead, and Frank Vormohr provided essential leadership on the issue. And current board member Mike Masters continues to keep a watchdog’s eye on the numbers.
Today, the best estimate from school corporation business manager Brad DeRome is that the general fund will have a positive balance somewhere between $2.9 million and $3.1 million when 2012 begins.
By the general rules of thumb for such things, that’s about where the school corporation should be.
One rule of thumb is that there ought to be a cushion of three staff payrolls in the event of an emergency. That would translate to about $2.4 million in Jay County’s case.
Another rule of thumb is that the ending cash balance ought to be about 8 percent of the budget, which would translate into about $2 million in our case.
If the year-end cash balance gets too large, it provides a tempting target for teachers during contract negotiations.
And there will be those, such as board president Greg Wellman, who believe as a matter of deeply held political philosophy that if the balance is too large, we’re over-taxing and should return some of the money to taxpayers.
Still others would argue that when the school corporation is self-insuring its health care costs, expenses are so unpredictable that a larger cushion of cash makes sense.
It’s always been a challenge to find equilibrium.
Now another factor is popping up.
The state of Indiana, which has actually been the source of much of the uncertainty about school finance over the past several years, could actually penalize school corporations that have been frugal and managed their funds wisely.
And that’s only going to make a tough challenge more difficult. — J.R.[[In-content Ad]]