The Demopolis City School board approved a budget amendment allowing for $906,000 to be cut to match the 7.5-percent proration declared by the state.

“We have to have our first budget amendment turned in to the state by Jan. 15,” said chief financial officer Linda Agee, “and we won’t have another school board meeting until Jan. 19, and this has to be approved by our board.

“What this entails is all of our carry-over federal money — all of the federal entitlement programs, like Title I — has to be budgeted for this year. We have some state carry-over money that they’ve allowed us to keep that has to be budgeted, and we have some bond money that hasn’t been completely spent that has to be budgeted. Then, we had to cut the budget due to proration.”

Proration occurs when there is a state shortfall of state funds in a given fiscal year, which begins on Oct. 1. For example, if the state has to cut 7.5 percent of its education budget in order to balance the state budget, then there is a 7.5-percent proration declared, and schools have to cut their budgets by that amount.

That amount seems large in itself, but considering that salaries are not able to be cut to appease proration and 70 to 90 percent of a school system’s budget goes towards salaries, that leaves very little that can be cut. Of the 10 to 30 percent remaining that goes towards utilities, school supplies and other school needs, that means that 23 to 70 percent of that money is cut to appease proration.

On Tuesday, grim budget news came from the state legislature, as Legislative Fiscal Office director Joyce Bigbee told lawmakers that combined general fund and stimulus spending would drop as much as $642.5 million in the next fiscal year, which begins Oct. 1, 2010.

Gov. Bob Riley is expected to present lawmakers with his proposed state budgets for FY 2011 on Jan. 12.

The board also approved a contract with The Balkcom Group LLC, a Montgomery business that identifies and recovers errors and overcharges in the overhead expenses of business.

Agee said the company will look at the way the school system is being billed and determine where the school system can save money.

The next meeting of the Demopolis City Schools board will be on Tuesday, Jan. 19, at 5:15 p.m. at the school board office.