When Gov. Bob Riley increased proration for the 2010 fiscal year in the state Education Trust Fund by 2 percent Thursday, it meant a cut of nearly $700,000 for education in Covington County.

Statewide, the increase from 7.5 percent to 9.5 percent cut this year’s budgeted trust fund spending by $113 million. Now, school systems must cut into reserves or borrow money to make up the difference this month.

Local school officials are calling the news “terrible, but not unexpected.”

Covington County Schools Superintendent Terry Holley said he’d hoped to make it into a new fiscal year before seeing an increase in proration.

“With the economy going the way it is, we knew it was a matter of time before it happened,” Holley said. “We had hoped it wouldn’t, but especially not in the last month of the fiscal year.

“What a lot of people don’t understand is that the 2 percent increase is for the entire (fiscal) year, not just this last month,” he said. “So, in reality this month, it will take 24 percent of the money that was supposed to come from Montgomery. That’s $350,000 for us.”

For Andalusia City Schools, that is approximately $175,000 and $144,000 for Opp City Schools.

Opp Superintendent Michael Smith said the only way the OCS can make up the difference is to utilize local funding.

“It’s too late to amend the budget,” he said. “We made plans for these days three years ago, and while this was somewhat unexpected, we will cover it. The key for us to remember is that we still have 1,360 students who came to school (Friday) expecting us to teach them, and we are going to do that.”

Like Opp, the remaining local systems will have to utilize reserve funds to cover the cost.

“We have to hope for the best,” Holley said. “We all have to work on things. We are facing times in education never faced before because of proration and the economy. Things are only going to get worse. The band-aids we have had in the last two years will be no longer after this year. Next year’s budget is very scary. No one knows what’s going to happen. In the coming months, legislators will have to make some touch choices, and every choice they make is a critical one for us.

“I know the legislature is creative, but sometimes creativity comes to a standstill, and we’re almost there,” he said.

Smithart said, “I hope that our communities begin to see the reality of what we are dealing with. I applaud our leaders for finding a way to fund recreational activities. I wish we all had the same passion for education, because we haven’t bought a textbook in three years.”

Riley said he was left with no choice but to increase proration for the education budget after he was informed BP would not pay the state on a $148 million claim in lost tax revenue. Riley said the claim was denied because of a lawsuit filed by Attorney General Troy King.

Riley said the economy was on track to sustain proration at 7.5 percent until the BP oil disaster in April causing the $148 million decrease in tax revenue, which meant a shortfall of $116 million in the ETF. The state is legally required to have a balanced budget, so when faced with an unbalanced budget, proration must be declared.

Of the $148 million claim, $116 million would have gone to the ETF and would have been enough to avoid the spending cuts.