Keeping you informed about the Evansville School District from my perspective. by Melissa Hammann
To give a very broad brush summary of all of these funds, only one of them (Fund 21, Donations) is projected to operate in the black for 10-11. Two of them operate in a flow through capacity and are therefore budget neutral (Fund 27 and Fund 90). Fund 10, the school operating budget, projects to spend $66,492 more than it collects in revenue. The debt service Fund 30 has stemmed the hemorrhage of over-spending next year from over $30,000 in each of the last 2 years to only $5544 next year. They managed this through refinancing a portion of the debt over the summer. About blinking time, I think. Food Service Fund 50 projects to spend $2401 more than it takes in revenue and fees this year. Last year the deficit was a little over $7000. I guess that alacart thing isn't working out so well for them after all. Even raising the lunch fees twice in three years hasn't helped this Fund. All in all, expenditures are projected to exceed revenues by $74,437 for those three funds. This just goes contrary to my inner miserly soul. It's never acceptable to spend more than you make. Take into account the bleak budget projections for the next state biennium budget and you're asking for budget misery and an empty fund balance in short order.
Fund 10 is the "budget" that the school board works with all year long to track spending and revenue. Expenditures from this Fund have accounted for 76-79% of net total expenditures in ECSD for the last two years. It is this Fund that the finance committee of the whole scrutinizes and approves transactions for every month. Over the summer, the finance committee approved refinancing part of the district loan, which changed some parameters in Fund 30. But the day-to-day fund that the school board focuses on is Fund 10. This is the fund to which the state aid and local property tax is deposited. Every year the brainiacs in Madison decide what "per pupil expenditure" they will shell out for each district. That process alone requires a PhD in finance to adequately understand. The state furiously attempts to "equalize" school aid through a complicated equalization formula. For the last three budget cycles, the state aid to ECSD ranged between 67 and 68% of all revenue flowing into Fund 10. Property taxes make up the bulk of the balance of revenue flowing into Fund 10. Federal funds, open enrollment and other state sources also contribute to Fund 10, but usually comprise only about 5% of the revenue streams for Fund 10.
The decision as to the magnitude of state aid to the district is not usually finalized until October, after the Annual Meeting. Once this is known, then the School Board is able to set the final tax levy. The Annual Meeting seeks permission from the electorate to set the levy. My experience on the board has been that the budget placed in the paper and brought to the Annual Meeting is a "worst case scenario" budget so that the district can request of the constituents at the meeting permission to levy a certain amount that would be the MAXIMUM required. Other districts don't have such a gifted business manager as we are lucky to have in our own Ms. Olsen. If the state contribution is higher than the "worst case scenario" brought in August, the local dollar contribution can be reduced to set the tax rate. As I understand it, the proposed Total Levy couldn't be increased without another meeting for taxpayer approval.
Last year, the state unexpectedly increased our aid by 4%, which allowed a decrease in the Local Revenue portion of the Fund 10 revenue stream, from 4.795 Million Dollars to 4.755 Million Dollars. Many of you may be wondering "How is the magnitude of the local tax levy calculated? If the local property tax total contribution to Fund 10 for last year went down, why the &*^() did the tax levy go up last year?" That is a good question, grasshopper. There are two parts of the tax levy for ECSD and, I suppose, for most school districts. The first part is the property tax required to maintain the Fund 10 district operating budget. The second part is the funds required to meet our Debt Service Fund 30 obligations (pay off our loan). Even though the unexpected boon from the state allowed the district to reduce the property tax contribution to Fund 10 last year, the amount due on our loan increased by about 5% last year, causing a net increase of 1.18% in the total levy in dollar amount.
In anticipation of a dismal state contribution next year, Deb Olsen has wisely projected less than 1% increase in state aid to Fund 10 next year. Even if every budget line item remained the same next year, the 5.8% increase in the Debt Service portion of our finance obligations would increase our total Tax Levy by 1.95%. Now take into account that the district anticipates spending $645,909 more this year than last year. This is more than double the magnitude of the increase in spending between school years beginning in 08 and 09. $478K of that $646K (74%) increase this year is in the "Instruction" line item, which includes all parts of the salary and benefits. That may seem high until you see that instruction between the previous 2 years increased by $290K among total expenditures that increased by only $317K, accounting for over 90% of the increase in expenditures last year. I surmise from this data that our district insurance rates are skyrocketing. The good news that can be taken away from perusing the budgets is that last year seems to have ended with $168K less spent than expected, which went into the Fund balance, immediately to be nearly completely decimated by the deficit budget written for this year.
The final piece of the tax puzzle is property value because tax bills come based on the calculated "mill rate" for the district, expressed in dollars owed per thousand in property value. Mill rates are calculated by a lengthy but straightforward procedure. First, the total local revenue value required to meet district obligations is determined. We'll call this R. Next, the sum of the total district property value from all cities and townships within the district is divided by 1000. We'll call this P. R divided by P will give you the mill rate owed by each property owner as local revenue to support the school district. Our current mill rate is 10.80. A home valued at $200,000 cost its owner $2160 in taxes for the school district only last year. The rest of your property tax bill supported city services, county services, U-Rock, Blackhawk, etc etc etc. I looked up the 2010 equalized value for Evansville online, which showed a decrease in equalized property value of 3% both last year and this year. If we assume that the rest of the district has a similar decrease in value, that means that a home considered to be worth $200,000 last year was considered worth $194,000 this year. If the total tax levy was unchanged, that home would still be responsible for supporting the district with $2160 in revenue. The mill rate has now increased from $10.80 per thousand to $11.13 per thousand. Same tax bill in dollar value, but the rate has increased because the property value fell. Now let's increase the revenue provided by this theoretical house by 6.99%. The new tax bill for the school district only comes to $2311. The mill rate is now $11.91 per thousand dollars of property value. The local school district portion of your property tax bill has gone up 6.99% when expressed in dollars, while your rate has increased by 10.29% due to decreasing property values. While it's sobering that the property values have decreased again this year, most of us are only concerned about the dollar value owed for taxes. Unless the state has a miracle discovery of billions of dollars somewhere and sends us more money than expected again this year (unlikely!), I predict that this preliminary budget that Ms. Olsen has prepared will remain and the 6.99% increase in Tax Levy will be necessary.
I hope that helps explain some of the mystery of School Finance. It always perplexed me and continues to find new ways to seem unnecessarily complicated to me. The goal of public education ought to be to provide equivalent education (which implies equivalent funding for every school) for all students from Alaska to Florida and all points between. One need only view the results of national standardized tests like the ACT and SAT to be disabused of this quaint notion. It is a sad truth in this great land of opportunity that some kids, who by sheer dumb luck live in Massachusettes will get one of the very best public educations in the nation while other kids who are unfortunate enough to be born in Missouri will get one of the worst educations in the nation. We in Wisconsin should count ourselves lucky to be in the middle of the pack, even if they'd like us to think we're "tied with third with Nebraska on the ACT." That's only true if you qualify the data to exclude all of the highest performing states. We are really tied for 17th place with Nebraska on national ACT performance data. It seems that the land that has produced so many marvels throughout history, both sociologically and technically, ought to be able to come up with a plan to solve this inequitable distribution of one of our nation's most prized cornerstones: public education.
3. You can write a school issues blog without worrying about conflict of interest.
4. People don't call you to complain about prom anymore.
5. People don't call you to complain about Poms anymore.
6. You don't have to sit through any more excruciating Policy Discussions in which 20 minutes is spent finding exactly the right word or phrase to accurately express the intention of the policy at hand. I know it's very important to do this. It just drove me crazy. It's the whole numbers vs. word dichotomy with me. Give me numbers every time. Typically, they don't have nuances associated with them.
7. People don't accost you at the Piggly Wiggly anymore to explain in gory detail exactly what a moron you are for voting such and such a way on an issue of great importance to THEM.
8. You don't have to try to make sound decisions after a 5-6 hour meeting marathon leaves you bleary eyed and exhausted.
9. You get to observe board meetings from a different perspective, which is a real eye-opener after facing the audience for three years.
10. And the top reason bears repeating: Board Meetings are Optional.
To balance this list, there is also another list that must be shared:
"Top Ten Things I Miss About Serving on ECSD School Board"
1). I miss signing the diplomas. As Clerk, I got to sign every diploma. It never failed to make me all teary eyed remembering these young adults as gap-toothed grade schoolers. My oldest child was really looking forward to having me sign her diploma in two years.
2). I miss being well informed about school news. The only people who really know what's going on in the district from a birds eye view is the school board and the administrator. They have to read about 200 pages of material every month that gives information from all parts of the district. Even going to every meeting as a citizen does not give you the data you need to get that firm grasp on the many nuances of intricate school business.
3). I miss being a voice for the underserved student-scholars of our district. As I have mentioned a hundred times or so, I am passionate about good, solid, classical educational values. In an effort to be everything to everybody, public education has diluted itself so much as to be minimally impactful for most students.
4). I miss interacting with collegues of like (and sometimes not so like) minds.
5). I miss addressing issues that really are important to the administration of a successful public school, like student achievement, curriculum and setting an environment of high expectations for our students.
6). I'm sorry I didn't get the chance to serve on the board with Nancy Hurley. She effectively communicates concerns while remaining respectful, most of the time.
7). I really loved being on finance. School finance is hard to grasp and I really enjoyed working with Deb to learn more every year.
8). Similarly, I miss playing with the student achievement data every year to detect trends and use the data to predict future performance. I am a nerdy data hound, let's face it. But if the data are not used to some useful end, it's relatively useless to collect it. I think I provided a well needed set of critical eyes on this bottom line in our district.
9). I miss being a role model for public service to my kids. My oldest just got into the NHS. Her gradepoint was never an issue, but she got involved in public service projects, possibly because she saw me and her dad before me become involved citizens helping to shape the public policy in our city. I will have to be careful to continue to cultivate this for my younger two children to remind them of their responsibility as a citizen.
10). Finally, I miss going to the Wisconsin Association of School Boards annual meeting in Milwaukee. There was always some state of the art presentation at the cutting edge of education to go see. I got to see Mrs. Oswald get her "teacher of the year" award at the WASB meeting as well.