The Butler County School System finds itself facing its third budget deficit in as many years.

According to the proposed budget for fiscal year 2014, the Butler County School System’s total expenditures of $31,402,476.07 have exceeded system’s total revenue of $30,809,171.85.

Of the total revenue, approximately $18 million is composed of state funding, while federal funding and local funding each contribute nearly $6.68 million and $5.98 million, respectively.

“Our expenditures are about $600,000 more than our revenue, and part of that is due to our 2007 bond debt,” said Chief Financial Officer Brandi Autrey. “And then the rest of that is due to the fact that the transportation budget is not fully funded by the state.”

The revenue pledged toward paying the six-year-old bond debt is derived from the county’s sales tax, which hasn’t been sufficient to cover the deficit.

As for the transportation budget, last year’s expenditure of $300,000 was actually cut in half to $150,000 this year due to an increase in state-allocated funds.

Even so, this year’s $150,000 transportation budget constitutes a notable chunk of the overall deficit.

Instructional services accounted for nearly half of all expenditures at 46.2 percent, followed by instructional support and operation and maintenance with 17.5 percent and 6.2 percent, respectively.

Transportation services, food services, administrative costs and other fund uses comprised the remaining third of expenditures.

Autrey concluded that there were a couple of options at the Butler County School System’s disposal to generate the revenue necessary to eliminate the deficit.

“Two ways to increase local tax revenue for the school system would be an increase in sales tax or an increase in ad valorem,” Autrey said. “Increasing the sales tax from 9.5 cents to 10 would generate approximately $910,000, and this would free up local revenue for the school system and allow more money to be spent on our student’s education.”

Butler County School System Superintendent Darren Douthitt added that though this is a situation that Butler County has found itself in before, it will require a heightened sense of awareness in regards to costs for utilities and materials through the rest of the school year.

“When I first got here, we had these same concerns and we found a way to make it work, and we’ll find a way to make it work this time,” Douthitt said. “Luckily, this time around we have a reserve built up, so the money that we ended up being short can be covered by the reserve — except it still puts us in a position where it shows that we have a declining revenue stream.”

And though finding a new source of revenue was of the utmost concern for many participants at Monday’s second budget hearing, Douthitt added that the half-percent increase in sales tax could be a viable method for resolving the issue.

“I understand the need for the citizens to not be continually taxed, but at the same time we know that a community without effective schools is not necessarily the strongest community,” Douthitt added. “The schools being as important as they are calls for an opportunity for us to have that resolution of this idea of a new revenue stream, and it’s just a matter of when and how that happens.”