"High Achievement always takes place in the framework of high expectation." - Charles Kettering

Saturday, July 10, 2010

Top Ten Reasons for ECSD to spend no more than they make.

Click on the post for a link to the WSJ article on the number one reason to write a budget that does not project spending to exceed revenue.

1. (See article in the Wisconsin State Journal). 2.5 BILLION dollar deficit projected in the biennium July 1, 2011 to June 30 2013. If you think our per student compensation is bad now, just wait until next year.

2. There's no money left in the government to bail anybody out.

3. It's just wrong.

4. Students suffer when you have to make changes to the budget at the last minute.

5. The fund balance is supposed to be for emergency use, like a boiler that blew or a roof that fell in, not for continued plugging of the hole planned for in the budget.

6. The fund balance is also supposed to make it easier on the taxpayers when the district borrows money for future growth purposes. A healthy fund balance of 15% earns lower interest rates on borrowing, just like a healthy downpayment on a house can earn you lower interest rates on your mortgage. If the district continues to eat up the fund balance by plugging the planned deficit in the budget as they have done for 2 years in the current economic downturn, there won't be any left when the time comes and the district won't get the best borrowing terms.

7. Some day the money ECSD saves every year on the heating budget is going to come back to haunt them with a brutal winter. Every year, there is a large savings on the heat budget. This year they planned 250K for heating and only spent 170K, showing 80K less spent than planned. Next year they kept the value at 250K, using the conservative approach that some winter might come next year and we will get slammed with a brutal heating bill. Let's hope that doesn't come to pass, but as with all things budget, if you don't plan for it, it will surely happen. Also, there is the completely obtuse governmental approach to things that if one reduces the budget plan, one forever loses those funds. It's crazy, but this is the mindset that must be used to write a budget that doesn't end up skewering the district in the long run. It's not as if one mild winter in Wisconsin should set the precedent on what future heating budgets should look like, but that's just the goverenment way.

8-10. Please repeat the concepts in numbers 1-3.

No comments: