The Sun Gets It Right This Week

[Bob Hudson]

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The editorial cartoon in the Walton Sun seems to be on the mark this week with one caveat. The 5 million dollar deficit is in reality a "projected deficit" rather than reality at this time. The school board has time to react in a responsible manner to address the reality of today. Times are tough - the national, state and local economies are in dire straits. Property values are continuing their downward spiral, sales tax revenues continue to decline, unemployment continues to rise, and the stock market is a disaster.

It is time for those on the School Board to be financially prudent. They need to act now rather than later to match the decline in revenues with a decline in expenditures.

Each family in Walton County is reducing their expenditures in each and everyway that they can while providing for their everyday needs.

The "revenue runup" is over, and the everything you can spend buffet is closed and someone has stripped the money tree of all of its dollars.

My question is simple - do we have the right people in these positions that can understand and face reality.

Mark Davis has clearly seen this coming for the past two years as he has attempted to slow the tax burden on each of us and still maintain a quality education for our children and grandchildren. Reality is here.

Mark we need you to be the leader once again. Waiting until January to make some changes is only going to increase the pain in the future. Start now and evaluate all discreationary spending, reduce your recurring expenses in every way you can and still provide for educational improvement. It is not going to be easy, but it can be done.

That's why you get paid the "Big Bucks"

Just my thoughts.

 

[John R]

economist(s)?

 

[Bob Hudson]

Ok - they have trouble with spelling

 

[John R]

Ok - they have trouble with spelling

makes pointing the finger a little bittersweet. The Sun really should hire a competent editor, or copy editor. The constant errors are comical.

 

[Bob Hudson]

Another way of looking at this might be a comparison of the impact of a potential 5 million dollar operating deficit vs the spelling ability of the cartoonist and the proof reader.

:funn:

 

[John R]

Another way of looking at this might be a comparison of the impact of a potential 5 million dollar operating deficit vs the spelling ability of the cartoonist and the proof reader.

:funn:

meaning we should have spent more money on their education? ;-)

 

[Bob Hudson]

No just spend what we have in the most beneficial way.

 

[Bob Wells]

Bob
Even a blind squirrel finds an acorn every now and then.

 

[mdd88jd]

What is really frustrating is that it is not really a "deficit." There is going to be six million less in our "fund balance," than we anticipated in May when the first budget numbers came from the State of Florida. We are still projected to have a six to six and half million dollar fund balance at the end of the school year. That is six million after we pay all the increases we anticipate for the year, including salary increases, new positions (believe or not necessary for ESE purposes) and after we absorb the anticpated revenue drops from the State.

But, obviously, we can't continue to lose six million each year in that fund balance so cuts are going to have to be made. Once the board reorganizes after the election, we will start the process of reviewing and scrubbing the budget. I have some ideas on some ways to save some money to put back in the fund balance. But, all of them, though necessary, will be painful. My goal will be to make cuts without affecting the the delivery of educational services... As always, I will not reject any constructive idea just because it is not mine...Thanks again...

 

[Bob Hudson]

Accounting 101 by Bob Hudson

Mark: Bad news - IT REALLY IS A DEFICIT - if the projections that Jim McCall laid out become reality then the Walton County School System will have a operating deficit. The Good news is its not to late to alter that. Your operating statement (surplus deficit statement) is one thing your balance sheet (an accounting of land buildings and equipment , fixed assets, retained earning etc) is another.

A bank would look at your Operating statement to see whether you had sufficient revenues to make the payments on a loan and would look at your balance sheet to determine what you have in reserves and what they could sell if you were unable to make your payments.

There are several concepts and standards that need to be clarified.

The formula for Statement of Support, Revenue and Expenses (Operating Statement) is defined in this manner:

In Not-for Profit and Governmental Entities

Revenues minus Expenses = Increase or Decrease in Fund Balance

In for Profit Entities

Income minus Expenses = Profit or Loss
Neither can borrow money to alter the formula or use reserves(fund balance) to alter the mathematical result.

Mark - if your statement is true the laymans explanation would be this.

We overestimated our reveues due to shortfalls from state funding and hold backs and we underestimated our expenses due to changes in salaries, etc. We had an operating deficit of 5 million dollars. We we able to avoid borrowing money to fund our deficit due to foresight of our administration to maintain a fund balance sufficent to cover our deficit.

A continuation of this will slowly errode our fund balance to the point that we will be forced to either reduce our expenditures or increase our revenues sufficiently to continue to remain financially viable.

A Deficit is a Deficit plain and simple.

PS I promise to call you for legal advice and interpretation