Loudon County Board of Education on Thursday passed a $36 million budget that includes a 3 percent raise for certified teachers and funding to boost the system's technology infrastructure in preparation for new state testing standards set to be fully instituted by 2014.

The new budget, which is more than $1 million over estimated revenues, also includes $425,000 for textbooks, up from $320,000 from the previous year, and a $100 raise for each BOE member. The district allocated $36,240 for board member salaries in the current budget. That figure will increase to $48,240 in the next fiscal year.

Board member Jeremy Buckles took issue with a couple aspects of the budget, including the BOE salaries and one-time expenditures that he suggested could be scaled back or funded piecemeal.

"I just think it is a little large to go and pass a budget that is $1 million in the red," Buckles said. "I think when the community sees that it's going to put up some red flags essentially in people's mind, and I'm not really comfortable with passing something with that large of a deficit."

The BOE passed a budget that was about $256,000 over anticipated revenues in 2012-13. Board members who supported passage of the new budget pointed to the $5 million that was sitting in the fund balance.

Board member Leroy Tate said funding for infrastructure built into the new budget was a necessary expense for the district to come into compliance with state standards.

"If we don't do it now with some money rather than roll it back into surplus, we're going to wind up asking somebody somewhere for a bunch of money if we don't go ahead and get our act together and be ready for this testing when the state mandates that we're going to have to do it," Tate said. "Somewhere along the line, we're going to have to bite the bullet."

Director of Schools Jason Vance, who noted that the school district typically rolls money over at the end of each year, said the new budget includes about $685,000 that could potentially just be one-time expenditures, including a couple of contingency teaching positions and money for new textbooks and technology.

"I think this budget is fair in regards to what we're asking for and as compared to what's coming down the line with state testing," Vance said.

Board member Ric Best said describing the budget as being "in the red" was not a fair analysis, especially given the school system's $5 million fund balance.

"The contingency funds - not just those recommended by law but those that the director likes to do as a safekeeping and wellbeing of the system — almost washes with the deficit that's not reoccurring," Best said. "To say the term '$1 million in the red' - that's not really accurate."

The school district was meeting the needs of the students in a financially responsible manner and keeping pace with state standards, board member Craig Simon said.

"I think we're doing better than we've done certainly in a long, long time," Simon said. "This is a very frugal situation. We're stepping up where we need to. There's no fat here."

The board passed the new budget by a vote of 8-2, with Buckles and Scott Newman voting against. The board then voted unanimously to direct Vance to ask Loudon County Commission to provide the same amount of funding as the last fiscal year, with the additional $1 million to be paid out of the existing fund balance.

In other business, the board:

Authorized Vance to go forward with a bus advertisement program that could generate additional revenue for the district with no risk involved. Ads could potentially be placed in two locations on each of the system's 36 buses for a total of 72 ads.

Vance would have the discretion to approve or deny potential advertisers. Profits would be split three ways between the school district, the bus drivers and District Solutions, the company facilitating the program.

Vance said he thought potential advertisers could be Walmart, Sonic and similar retailers.

"If you did like Cumberland County and gleaned like $11,000, that's $11,000 that we didn't have before, so it's just straight money to us," Vance said. "It's of no risk to us at all."

Board member Kenny Ridings expressed some misgivings about ads on buses. "As far as the money goes, that would be great," Ridings said. "It isn't a little tacky?"

"It's a little bit tacky," Vance said. "... Mr. Ridings, you're absolutely right. Some people would deem this to be tacky."

The board passed the ad program, with Ridings and Newman voting against.

Approved the following new coaches: Emily Everett at Loudon High School, and Melissa Cooley and Jason Oody at Philadelphia Elementary School.