At Last...a Glimpse of the Budget to Be

The School Board's Finance Committee will finally offer a glimpse of the 2012-13 budget this Monday (March 26).  Catch it now, because it because the Committee wont discuss the complete budget until July and the first public hearing will not be until July 30th. Don't get all hopped up on goofballs, though, because--as usual--what is NOT discussed is that of greatest interest...and concern.

2012-13Budget Presentation for 3-26-12

Highlights of the budget include...

REVENUE PICTURE  (extra $350K in aid...all going to debt service)

 The  State is increasing the spending amount per pupil by $50/student The State is giving a special one-time aid (“Per Pupil  Adjustment Aid”  2011 WI Act 32) to districts of $50 per student if the district’s under-levy amount isn’t increased . To ensure that we receive this $350,000, the general levy must be at least $37M.

NOTE:  Last year the General fund levy was $36,025,757 and debt service tax levy of $11,070,101, for a total tax levy of $47,095,858.  This means, according to the district, that already the general fund levy must increase by about $1M (2.8%).


 Using RW Baird forecast model and conservative assumptions, current estimate is for a 4.5% ($1.4 M)
increase in aid for SPASD.  Note here that these are revenues, which are offset by expenses.  The tax levy is OVER those expenses covered by revenues.


 Planned increase in athletic fees of approximately $23,000 and will come forward as information to the School Board
Notice how suddenly we actually get a dollar figure?

COSTS
 The 2011-12 budget used $1.1M in one-time Federal money which is no longer available; therefore, the 2012-13 budget needed to absorb these costs.

 Preliminary budget is based on an increase of 141 students, or 2%.  Note that enrollment increases THIS year do not result in increased state aid.  That comes NEXT year.  For now, this typically represents an equivalent increase in EXPENSES.  Enrollment projection models by UW-Applied Population Lab show a range of 189-329 student increase.  Last year, the enrollment increase was 135 students, or 2%.

 The biggie!  Budgeted 2% salary increase for all.  A placeholder in an amount equal to 2% of last year’s salaries has been included in this preliminary budget until actual allocations are determined through negotiations and/or other Board actions after July 1.

Note...what no one is saying (hmmmm...wonder why) is how much this means in dollars and cents.  Allow us to help.  Last year total salaries amounted to  about $42.2M, which means that a 2% increase will cost us about $850,000.

Cost cutting
 Increase health insurance contributions from 9% to 12% for all employees
 To limit health care cost, redesign health insurance and increase emergency room co-pay for all employees
 All employee groups will pay the same contribution amount  (12%) for dental insurance.
 To reduce dental insurance costs, the district bid out dental insurance and the premiums will go down 7%.
 To limit long-term disability costs, the district bid out LTD insurance and the premiums will go down 29%.
 These will be discussed with the HR Committee in May
Don't get us wrong, we are thoroughly impressed with the board for pushing these behind the scenes.  Finally, we achieve health benefit equity across the district!   These are all awesome things...but without knowing the actual DOLLAR amount, we cannot know how significant these are.  For example, if LTD insurance premiums cost us $100K, reducing them 29$ saves us $30K....which is nice...but a drop in the bucket of a $72-$75M expense budget.

No new programs (unless of course we have another annual meeting surprise)
No additional funding for new programs or new budget initiatives

Debt Levy increase 8%
Based on the debt payoff schedule, the debt levy would increase 8%, and this would increase the overall levy by 2%.
Again...all these percentages...why not tell us what it means in dollars and cents?  Here's our math.  We've shown you ours...will the district show you theirs?
Last year debt levy = $11,070,101
8% increase = $11,955,709
Increase = $885,608


Total levy LY = $47,095,858
885608/47095858= 1.88%
Hmmm...did we round up again? 

 In the preliminary budget, the $350,000 one-time l  special state aid is intended to further reduce debt.


Projected Total Levy % Increase 3% or less

Where's that breath mint I had?

If the debt levy will increase the overall levy by 2%, and they project a total levy increase of only 3%, that means only 1% of the increase coming from the General fund.  Hmm...but we already know that the general fund levy would have to increase by 2.8% in order to get the addition $50/kid aid...right.  If the total levy increases by 2% from the debt levy and the general fund HAS to increase by 2.8%, doesn't that mean a whole lit more than 3%????
This math is as fuzzy as a mint covered in pocket lint.
Oh...and will this "3% or less" be  Diedrich line in the sand?  Or subject to waffles?

When will we hear more?
Finance Committee reviews complete budget in July
5. Public Hearings on the budget: July 30 and August 16


What AREN'T we being told?
1. What about the surplus from this year's (2011-12) budget?  It sure looks like it could be upwards of $500K.  Where is that in this equation?
2. How much we will save from retirements?  Even 5 teachers at $77K, if we replace them all with teachers paid even $40K, that's a savings of $37K each, for a total of $185K.
3. How WILL we deal with the $1.1M of costs in the budget that we paid for last year with the EdJobs money?  We don't have that this year.  Can you say ...tax levy?
4. What's the current wisdom on equalized valuation? Notice how not a peep was uttered? 
5. What happens if the sky falls and UW APL's projection is accurate....how much additional costs will we need for additional kids?
6. Any feedback on open enrollment, given the longer timeline and more flexibility?  Will we lose more (expense) or gain more (revenue)?