BY JONAS BEALS AND JEFF BRANSCOME

The proposed budget for Stafford County schools has been an exercise in cost-cutting.

It eliminates 56 positions and doesn't even contemplate raises for teachers.

The Stafford government budget, on the other hand, is looking pretty healthy. Revenues have risen over last year, and the Board of Supervisors plans to fill reserve funds and hire new sheriff's deputies. Supervisors even found an additional $1 million that schools will use to eliminate proposed furloughs.

But does the school budget have to be so austere?

A new Board of Supervisors budget proposal encourages school officials to use some of its $25 million fund for employee and retiree health services to eliminate the sting of budget cuts.

When supervisors saw the money set aside for health benefits, they felt they had discovered the solution to the schools' budget problems.

Some school officials don't see it that way.

BENEFITS BATTLE

Supervisor Cord Sterling revealed his budget plan for the school system before a public hearing on the county budget Tuesday night.

Sterling suggests that school officials use cash in their health services fund to reinstate the 56 cut positions and give all school employees a 2 percent pay raise.

But some school officials think dipping into that money could be a mistake that leads to a bigger financial crisis down the road.

A significant portion of the $25 million balance in the school's health services fund is earmarked to pay for retirees' healthcare benefits known as "Other Post-Employment Benefits," or OPEB.

Stafford Assistant Superintendent for Financial Services Wayne Carruthers said in November that a failure to properly fund those benefits "could result in a liability that becomes insurmountable to fund, causing the retiree health benefit to be reduced or possibly dropped."

Both Stafford government and Stafford schools have committed to paying for their retirees' health benefits. They currently handle this on a pay-as-you-go basis. When a claim comes in, it is paid with money reserved for that purpose. Last year Stafford schools paid about $1.5 million for those benefits.