Good News: July 1 Initial State Aid Estimate UP
Phil Frei reported that the district had budgeted on receiving approximately an 11% increase in state aid (the increase related to the 4K program). The July 1st estimate from DPI indicates an increase of approximately 12.5% is expected.
That means about $300,000 MORE in state aid, and thus $300K LESS for the tax levy
Not So Good News: Special Elector's Meeting could increase Busing Costs
At the full meeting of the school board, a special elector's meeting was scheduled for July 28, in response to a petition (as per state statutes) containing at least 100 citizen signatures calling for a special meeting of the district electors (anyone of voting age that has lived in the district at least 10 days). The item up for vote is to change the maximum distance that middle school students must walk before district bus transportation is provided from 2.0 miles to 1.5 miles.
If a majority of electors who come out for the July 28 meeting vote in favor of the change, the net effect will be to increase district busing costs by about $292,000 for 2010-11, which will increase in future years.
If the busing change is approved...and that certainly looks to be the outcome, then the effect of the increased aid is effectively negated.
Not So Good News: Equalized Value Projection LOWERED
Following discussions with the city, Phil Frei recommended that the projection for property values district-wide (the "Equalized Value") be lowered from an initial estimate of 1% growth to 0% growth.
This means that because the Equalized Value is decreased by 1%, then the Mill Rate increases by 1%. A projected $12.00 per $1,000 of assessed value mill rate now projects out at $12.12 ($30 additional property tax on a $250K home).
SP-EYE - Hmmm....play back those Finance Committee DVDs. We think you'll find that citizen representative on the Finance Committee Rick Mealy pressed the committee back in the spring to use a 0% growth estimate. Of course the committee disagreed and voted to use the 1% growth estimate. What a difference 6 weeks makes. eh? Mealy's rationale was that all indicators at that time pointed to a net 0% increased in property values; in fact the City of Sun Prairie was basing ITS budget on 0% growth. In addition, it is far better to initiate budget discussions with a worst case scenario and then as projections become more solid, a brighter picture for the mill rate might emerge. It's better to go into the Annual Elector's Meeting with better news...right? Now we've told the community to expect a mill rate of $12.00 and in one fell swoop, it increases to $12.12.
The net effect of these three changes (since the increase in state aid and the increased busing costs are basically a wash) is to increase the projected mill rate to $12.12.
Factoid of the Week: (based on current budget parameters) Every $1M change in the tax levy changes the mill rate about about $0.25.
So...either cutting or increasing the tax levy by each $1M changes the mill rate by 25 cents.
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