Ala.'s Largest District May Close After Budget Cut
Alabama's largest school district is making plans to shut its doors in the wake of Gov. Guy Hunt's declaration of an across-the-board, $145 million cut in the state's education budget.
Officials in the 67,850-student Mobile County school system said last week that unless the district receives an immediate infusion of about $4.5 million, it will be unable to meet its November payroll and will have to cease operation at the end of this month.
Last week, the district's only apparent hope of averting a shutdown rested with a legislator's preliminary proposal which still faces several hurdles--for a 1 percent payroll tax in Mobile County.
Moreover, a number of other districts in the state are also in "dire straits" financially, said Sandra Sims-deGraffenried, executive director of the Alabama Association of State Boards of Education.
State Superintendent of Education Wayne Teague said he had conducted an "unofficial" survey that revealed that 12 or 13 systems statewide will have exhausted their borrowing options within about two months.
None of the other districts is nearly as large, however, as Mobile-which educates 1 of 11 students in the state--or as close to exhausting all of its resources, officials said.
Mr. Hunt ordered the 6 percent proration effective Oct. 1, the start of Alabama's fiscal year, in order to comply with the state's balanced-budget mandate. No other parts of the state budget were prorated, said Terry Abbott, the Governors spokesman.
Mr. Teague contended, however, that the 6 percent proration amounts to an effective cut of 40 percent, since $85 or more of every $100 in a district's budget goes to salaries, which cannot be shaved back.
"I'm in my 17th year in this job, and I've never seen the situation as bad as it is now statewide," Mr. Teague said.
Mobile's Grim Outlook
With $15 million in debt incurred during state-budget prorations in previous years, Mobile's financial situation was already grim. But things worsened considerably with the Governor's cuts, said Gone Tysowsky, a district spokesman.
After losing about $8 million because of last year's 6.5 percent proration, the Mobile district stands to lose $7.2 million this year in state funds, which are allocated monthly.
"At the end of this month, we'll be $600,000 poorer," said another Mobile spokesman, Barbara Shaw.
Mobile is proportionately more dependent on state aid because it has the lowest amount of local fiscal support of any major metropolitan district in the state, one official said.
Although districts across Alabama frequently are able to cope with proration by borrowing to meet their expenses, officials said, that option is a less viable one for Mobile.
"We're not able to get that kind of support," Mr. Tysowsky said. The district, he said, is "maxed out."
Four Mobile-area banks this month turned down the district's request for $4.5 million to carry it through the end of the calendar year, when it will be able to access local property-tax monies.
A state takeover of the financially troubled district would be another way to keep it open, officials said. But Mr. Teague said he would prefer not to do that, noting that it was unlikely the state could do anything for the district that it could not do itself.
"That's not going to put new money on the table," Ms. Sims-deGraffenried said of a state takeover. Instead, she warned, it would mean "laying off staff left and right."
But Mr. Teague said children in Mobile County will not be allowed to go without education. "The schools in Mobile must operate in some fashion," he vowed.
Even so, the 6,500-employee district last week was putting together "contingency plans" in case it had to shut the schools, including the notification of teachers and parents, preparation of lessons for children to do at home, and distribution of unemployment benefits and food stamps.
"We're not trying to create panic at this point," Mr. Tysowsky said. "We are keeping our fingers crossed that we'll get some good news."
Payroll Tax Sought
The proposed 1 percent payroll tax could raise about $32 million a year, said Representative Mary S. Zoghby, who is chairman of the House delegation from Mobile.
The legislature is not now in session, however, and it was unclear last week whether the Governor, who is under investigation for his alleged misuse of a state plane to travel to preaching engagements, will call a special session before the regular session opens in February.
The state board of education last week called for a special legislative session. The panel also urged that districts not begin the 1992-93 school year until Oct. 1, 1992, in or- der to include any proration in their ' budget plans, and recommended a reduction in the minimum school year from 175 days to 160 days.
Mr. Tysowsky said that if the payroll-tax proposal receives the backing of a majority of Mobile's legislative delegation, that could represent "enough of a comfort zone" that the banks would lend the money even without a special session.
But the Mobile delegation was still reviewing last week a revised form of the tax proposal, Ms. Zoghby said, and she has not yet asked for a formal tally of support among her 10-member House delegation.
"Everything's kind of up in the air," she said.
Separately, the state schoolbeards association is backing a lcent increase in the state sales tax to help schools statewide.
Vol. 11, Issue 07, Page 15Published in Print: October 16, 1991, as Ala.'s Largest District May Close After Budget Cut