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Thursday, October 16, 2008

Issue The SC Legislature Will Face With Revenue Shortfall

Districts spend the vast majority of their General Fund allocations on salaries, so cuts must be made to items such as travel, supplies, maintenance, etc., items which typically make up only 12% of the overall budget.

Even a relatively small cut on the General Fund dollars can have a big impact.

Assumption 1: Salary and Fringe Benefits constitute 88% of the General Fund Budget.

Assumption 2: This leaves a non-salary/fringe budget of 12%.

Assumption 3: The decision is made not to layoff teachers or support staff.

This means only 12% of the General Fund Budget is available to absorb any State cuts.

If there is a 3% budget cut, this would equal 25% (3/12) of the non-salary/fringe budget.

If the cut comes at mid year, and half of the funds are already expended, then that 3% would equal 50% (3/6) of the remaining 6% of the non-salary/fringe budget.

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