Why Don't the Numbers Ever Add Up?

Why does this whole budget get more convoluted every year? For years we were shown the projected mill rate increase. Even last year we were shown the tax levy amount, the tax levy increase, and the projected mill rate based on several equalized value scenarios.  Now, suddenly, we're told "forget about the mill rate--it's beyond our control". We're told to focus on the tax levy. Sure...except the tax levy doesn't tell the average Joe what that means in ternms of how much extra cash he needs to pony up come tax time.

 What changed? Well...that's simple. For years and years, the equalized value of property was growing by leaps and bounds. And that's nice because in the mill rate formula, the equalized value is the denominator. Recalling our basic math, the larger the denominator, the smaller the net result (quotient). Property value appreciated so nicely, that districts would always be able to report a lower mill rate increase come fall than projections during budget planning. Two years ago, during the budget process, there was no discussion of "tax levy" increase. What we were told was:

The mill rate would be the highest in 2009-10 at $11.42. With the introduction of 4K and the increase in equalized aid it brings, the mill rate starts to decline in 2010-11.

Starts to decline, huh? Great prediction there, puts you right up there with Harold Camping!    For the 2010-11 year, the district-wide mill rate was $12.12, which is 6% higher than the projected mill rate zenith. For 2011-12, the district-wide mill rate--- with another 3% drop in equalized value, and if the board approves spending that "unallocated" $725,000--- COULD reach $12.93, 13.2% higher than the projected maximum.

Math Problem Number 1: the magic $725K.  

The district told us that there was $725K "unallocated" in the budget. Then they gave us a list of "wants"...you know like a kid's wish list before entering Toys 'R Us.  They don't want to take the $725K out, ostensibly because they want to provide "the worst case" scenario for the budget...i.e., they spend that "unallocated" $725K on something else (their wish list).  

This doesn't pass the smell test as a response because IF they really wanted to present the worst case scenario, then why did they calculate the projected property tax increase ($84 for a $200K home) on 0% growth?  Phil Frei told us that current projections are that the equalized value would be coming in at a 2-3% decrease.  If presenting the worst case scenario was their goal, then why not say an additional $162 on a $200K home.  We think you know the answer to that.

The second head scratcher is that if one totals the cost of implementing everything on the "wish list", it comes to only (only?) $600K.  Okay.........where's the other $125K come from???  More slush money?  If there's nothing even on the wish list on which to spend it, why is it even there?  Kinda reminds us of that scene in Wayne's World when  Mike Myers' Wayne Campbell receives a gun rack as a present from his creepy stalker ex-girlfriend.  Unallocated money in the budget?  Shee...YAH...you don't even have a budget!

More Funky Math: The Levy that Wouldn't Add Up.
This math is no longer fuzzy...it's just plain funky.
Bear with us here.  Let's start with Phil Frei's PowerPoint presentation that tells us that the projected tax levy increase is 3.48% .  He doesn't tell us what the actual dollar amount is.  But, no problem, we can just schlep on over to the DPI website and get that info.  We find that for 2010-11, the tax levy, was $45,503,637.  So...a 3.48% increase would mean a 2011-12 tax levy of $47,087,164...right?  And that's an increase of $1,583,527 over last year...right?  Perfect so far.

So then we look at Phil's slide 17 from the June 16th public hearing on the budget.

pThe current projected levy increase is 3.48%.

pThe general fund levy increase is $955,916. 

pThe referendum approved debt levy increase is $647,000.

pThe combination of both levies equals the 3.48% increase.

Seems pretty straight forward...right?  I mean we're talking a percentage to TWO decimal places.  It's THAT precise.
Only...Only...if we add the $955,916 to the $647,000, we get $1,602,916...

...and we just got done saying that a 3.48% increase to last year's tax levy is exactly $1,583,527.
And that represents ANOTHER  $ 19,389 in the budget for which we have no explanation!
 Yes...we know...it's "only" $20,000.  Who cares...right?  In the big picture of the budget, it's small potatoes.

But it could also pay for a hefty amount towards a new gym floor at Royal Oaks.

And more to the point...WE didn't say the tax levy increase was exactly 3.48%....the district did.

Why didn't they say a 3.52% increase? (which would be accurate).

Could it really be as silly as them needing to show a figure below the "goal" of less than 3.5(0)%...so they just 'fudged' it? 

The Bottom Line

The numbers just never seem to add up.  Do they even LOOK at the numbers they gave us previously? Do they ever check their math?  Isn't that something we expect out of our 4th graders?  

Is it too much to ask to see all the information for a draft budget?

Is it too much to ask that numbers add up and make sense?

We don't think so.