BAY MINETTE – The Baldwin County School System is in good financial condition at the moment, but a long-term economic downturn could have a major impact on operations, educators said.
John Wilson, chief financial officer for the school system, told Board of Education members at the March 17 work session that an economic slowdown could hit sales tax collections in upcoming months.
“I will say that if this situation continues to escalate as well as becomes prolonged, then we will be faced with a serious situation because sales tax receipts will drop,” Wilson said. That’s the reality of where we are. We’re entering into a time of true economic uncertainty from a lot of different standpoints regarding just how long this particular situation with coronavirus will last and just how bad it could potentially get.”
At the end of February, the school system was in a good financial position, Wilson said. He said the system is projected to have a reserve fund of about $55 million, enough for two months operations, by the end of the fiscal year.
“We have a strong reserve balance and so we’re in a relatively good spot to enter into these financial uncertain times,” Wilson said. “We’re not going to overreact. We’re going to continue to watch and act appropriately as we continue to see what occurs not only in Baldwin County, but throughout the state and nation as it relates to this particular pandemic.
Sales in some areas, such as grocery stores and the beaches before they were closed by Gov. Kay Ivey on March 19, were up. Sales tax collections, however, take about 45 days to reach the school system, so any declines won’t be felt for more than a month.
“Fast forward to where we are today, Wilson said. “There’s been a tremendous amount that’s occurred in just the last week. The economic impact of the coronavirus is something that I’m just really not sure of. We’re not seeing a direct impact today.”
Superintendent of Education Eddie Tyler said careful financial planning and spending have left the system in good condition to face a slow economy.
“One thing that is encouraging is the way that we manage our money. No one saw this coming. Sometimes you can see those recessions. You can see certain things coming, but no one saw this worldwide situation coming that’s having an effect on the economic landscape,” Tyler said. “Yes, there will probably be a downturn, but hopefully that will swing eventually and maybe they’ll get a handle on this and we’ll all be back to normal.”
The school system shut down classes on March 17. Classes had been scheduled to continue until March 18, but Tyler said reduced attendance led administrators to decide that the time had come to close.
“I think that we stayed open for all the right reasons,” Tyler said. “That was to accommodate mothers and fathers trying to find daycare. They’re probably safer in our schools than they are out there on the streets or in the malls or on the beach. Things just ramped up so much down to the local levels from the feds about not gathering with more than 10, keeping six feet apart, stuff just keeps coming. It’s hard for me have a layer of protection over all employees.”