Given revenue shortfalls in the state’s education budget, Gov. Robert Bentley last week declared 3 percent proration in the fiscal year 2011 Education Trust Fund.  

For the Leeds City School System, the announcement did not come as a surprise.

“At this point, the 3 percent proration does not mean a lot for our system. We planned ahead so these cuts will not be traumatic,” said Harry Higdon, financial officer for Leeds City Schools.

The education fund proration means a loss of about $31,000 monthly for the system, beginning immediately.

While the school system should be able to take this round of proration in stride, Higdon said it would become more serious if proration is announced for the fiscal year 2012 budget.

“More proration could become a problem in 2012. We will also be losing federal stimulus funds in the next fiscal year,” Higdon said.

Those stimulus funds were approximately $950,000 for the 2011 fiscal year.

With one-time federal stimulus money now depleted, Alabama is left with the loss of hundreds of millions of dollars in both the education and general fund budgets, according to a press release issued by the governor’s office. The current Education Trust Fund budget has a $165 million shortfall while the current General Fund budget has a $110 million shortfall. The governor declared a 15 percent proration for the general fund.

“Both our Education Trust Fund and our state’s General Fund budgets are based on unreliable revenue projections,” Bentley said. “Now, five months into the 2011 fiscal year, it is clear that there is not enough revenue to sustain either budget. Proration is necessary to balance the budgets.”

“The taxpayers expect us to live within our means just as families and businesses are forced to do,” said Finance Director David Perry. “No one is pleased that we have a revenue shortfall which requires proration in the budgets that were passed last year, but mid-year cuts are necessary for Alabama to meet its constitutional obligation for a balanced budget.”

As for the Leeds City School System, Higdon said there are some unknowns that could help offset the losses of the federal stimulus funds and possible proration.

“There are a lot of questions yet to be answered. We don’t know yet what impact (The Shops of) Grand River and other businesses will have on our budget. We do have revenue opportunities locally that could help,” he said.