VIGO COUNTY, Ind. (WTWO/WAWV) – Vigo County school teachers may be receiving retroactive pay for the 2019-2020 school year after the ending cash balance for the year was higher than anticipated.
Superintendent Dr. Rob Haworth said as 2019 came to a close, he was previously concerned that providing retroactive pay would cause the cash balance to fall below $13.5 million.
However, he said the cash balance at the end of the 2019 fiscal year was over $13 million. Adding the rainy day fund and protected tax waiver funds to the cash balance brought it to $16.2 million, according to Haworth.
“This week, when we discovered our adjusted estimated cash balance would be above $13.5 million, we sought to improve teacher contracts for 2019-20 because it’s quite simply the right thing to do,” Haworth said in a statement released Thursday morning.
Haworth said the school corporation reached an agreement wih the Vigo County Teachers Association Wednesday night to reintroduce retroactive pay and improve the minimum salary of teachers who have at least one year of experience. The agreement with the VCTA is an estimated package of $1.1 million.
The agreement must still be approved by the Vigo County School Board.
When asked if the referendum was still needed despite the unexpected cash balance, he said, “most definitely.”
“When you think about either a $7 million or a $9 million in deficit spending our referendum was for seven. We already tied $3 million of that up in teacher’s salaries so the $4 million worth of cuts are still needed.”
He explained in the discovery of the additional money, the school district also found other issues.
“We’ve also come to discover that there were just over $700,000 of unpaid bills in 2019 that should have been paid.”
“We need to make sure these numbers work,” said Haworth. “I’m feeling this allows us to get back on track to doing the real work which is getting into those spending cuts, investigating those.”
He said they will start adding finance discussions to board meetings to update where the corporation thinks they are at with numbers.”
Read Haworth’s full statement below:
Vigo County School Corporation teachers and staff are committed, passionate professionals. But our teachers, like their colleagues across the state of Indiana, often have to take on second jobs to make ends meet. Teacher pay is tied to funding from the state sales tax, and teachers across Indiana are not paid what they are truly worth. We have a teacher shortage across our state and here at home, and pay is certainly part of the problem. We must continue to find ways to improve teacher pay.
As 2019 came to an end, and as we were negotiating a contract, I was concerned that by providing retroactive pay, the cash balance would fall below $13.5 million. As we closed out the 2019 calendar year, it became evident that we could, in fact, provide retroactive pay to our teachers. In reaching out to Vigo County Teachers Association leadership, we sought to reintroduce retroactive pay. Last evening, we reached a tentative agreement that must be approved by the school board to do that, as well as improve the minimum salary of teachers with at least one year of experience.
As we close out the 2019 fiscal year, our cash balance ended at $13,031,773. If you include the Rainy Day fund, that total rises to $14,610,247.
Over the last 10 years there have been continual changes in the state statutes regulating education in order to protect the amount of property taxes assigned to the Debt Service Fund. In 2019 the VCSC qualified for the protected tax waiver in the Debt Service Fund. In essence, this would allow the school corporation to transfer these funds from the Debt Service Fund to the Operating or Education Fund. Due to the December 2019 collections, the protected tax funds arrived at $1,629,300. Originally, we projected this income to be $1.2 million. Adding the protected tax waiver funds to our cash balance makes it $16,239,547.
Tonight’s agreement with the VCTA is an estimated package of $1.1 million dollars. When combined with outstanding bills of $710,687 from the 2019 calendar year, our adjusted estimated cash balance is $14,428,861.
The Vigo County School Corporation is committed to maintaining a cash balance of 13.5 million dollars, which will protect our bond rating. A favorable bond rating is key to bringing important advancements to our schools. This week, when we discovered our adjusted estimated cash balance would be above $13.5 million, we sought to improve teacher contracts for 2019-20 because it’s quite simply the right thing to do.
Throughout our community conversations regarding the referendum, we reminded the community that we would need at least $8 million of spending cuts if the referendum did not pass. In 2019, we spent more than $7.2 million than we brought in from federal, state, and local resources, however when adjusted to include retroactive pay and 2019 outstanding bills, it exceeded the $8 million mark we spoke of in our community meetings. We are thankful for the passage of the 2019 referendum, however, as these numbers indicate, the referendum dollars must work in tandem with reduced spending to create a balanced budget.
Reducing our spending is a long-term strategy, and we must face the reality of declining enrollment. Spending cuts proposed in October 2019 will right-size our budget for our enrollment. In the meantime, we must continue to retain and attract the quality teachers we have come to expect in Vigo County, and it is my hope that revisiting 2019-20 compensation in light of a better-than-projected cash balance will help meet that important goal.
Decreasing enrollment continues to be the major issue for the district. Vigo County School Corporation enrollment fell by more than 200 students in 2019-20 and the total number of school-aged children living in Vigo County fell by more than 300 students. Vigo Virtual Success Academy has been successful at slowing our enrollment decline. However, unless we see a change in the state funding formula, our projected increase in “new” money for 2021 will once again be less than 2%.