Transcript Our Kids Can’t Wait - Farmington Public Schools

SCHOOL
FUNDING FORUM
Revenues
Expenditures
Farmington Public Schools
1
School Aid Structural Deficit
Spending Pressures Outpace Revenue Growth
•
•
•
•
•
Retirement Contributions—Rapid Growth
Employee Health Insurance—Rapid Growth
General Pay Raises
Other—Fuel, Utilities, Supplies
Revenues Growing Slowly
2
School Aid Revenues &
Spending Pressures
• Spending pressures grow 5% per year
• Revenues grow 3% per year
• Shortfall of 2% each and every year
without spending and revenue policy
changes
3
School Aid Problem (SAF)
•
•
•
•
Economy
Shifts in Revenue Sources
Less Revenue from the GF
Budgeting for items not originally
intended for the SAF
4
GF Transfer to SAF
Fiscal Year
$ - Millions
1995
$665
1996
621
1997
278
1998
376
1999
421
2000
420
2001
385
2002
198
2003
384
2004
378
2005
164
2006
63
2007
35
2008
35
5
How Are Schools Funded?
• Pre-Proposal A
– Local Property Taxes Stay
Locally
– Sales & Use Tax - 4% (60% to
Schools)
– Income Tax - 4.6
– Cigarette Tax - 25 cents
• (.02 to schools)
– Other Tobacco - None
– Real Estate Transfer - None
– Property Tax 34 mills
(average)
– Cap on Property Tax- None
• Post-Proposal A
– Local Property Taxes go to State
– Sales & Use Tax – 6%
• (60% of 4% and 100% from
2%)
– Income Tax – 4.4 (was 3.9, now
4.35)
• (14.4%)
– Cigarette Tax - 75 cents
• (63.4% of collection)
– Other Tobacco – 16%
– Real Estate Transfer -.075%
– Property Taxes (6/24)
– Cap on Property Taxes – Lesser
of 5% or Inflation
– New Use Tax???? Repealed
6
SOURCES OF 2007 SCHOOL AID REVENUE
Lotte ry Profits
5.85%
Fe de ral Funds
10.80%
Othe r Re v e nue
0.23%
Othe r Funds
1.89%
Other Tax Revenues
0.94%
Sale s and Use Tax
40.83%
Re al Estate Transfe r
Tax 1.85%
IFT/CFT
1.09%
Liquor Tax
0.28%
Tobacco Tax
3.52%
Income Tax
16.48%
State Education Tax
16.25%
7
Farmington Schools Funding
• Pre-Proposal A –
1993-94
– Homeowner Property
Taxes – 32.77 Mills
– Hold Harmless Mills – 0
– Debt Mills .74
– Total Homeowner
33.51Mills
– Total Business 33.51Mills
– State Funding – 0%
– Local Funding – 96%
– Federal Funding 2%
– Other 2%
– Adds up to $8,407 per
Student
• Current Under –
Proposal A – 2007-08
–
–
–
–
–
–
–
–
–
–
Homeowner Prop. Tax – 6 Mills
Hold Harmless 8.3784 Mills
Debt Mills 1.8 Mills
Total Homeowner 16.1784 Mills
• Reduction of 17.3316 Mills
Total Business – 25.8 Mills
• Reduction of 7.71 Mills
State Funding – 50%
Local Funding – 37%
Federal Funding 2.2%
Other 10.8%
Adds up to $10,500 per Student
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Without Proposal A
• Current Funding
– Foundation Allowance
•$10,500
– (22% Increase Since
1994 Average of
1.57% Increase
Inflation Average
2.6%)
• If No Proposal A
– Foundation Allowance
• $14,611 or $56 million
in Additional Revenue
(if we had not passed
Proposal A or made
any other changes to
funding)
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Per Pupil Foundation Funding
$5,721
$2,067
Homestead
Nonhomestead
State Aid
$2,712
10
20J
• Part of Farmington’s foundation allowance
• Separate Categorical established in the
Engler administration when a flat $ amount
was allocated for a particular year
• Topic of discussion during budget
• If taken away, harms hold harmless
districts inversely
• Any reduction proposal should be
equitable to all districts
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REVENUE
2007-08 General Fund Budget
50%
13%
37%
State Aid
Property Taxes
Other
12
EXPENDITURES BY OBJECT
2007-08 General Fund Budget
2%
0%
0%
58%
6%
4%
30%
Salaries
Purchase Services
Transfers
Intergovermental Payments
Employee Benefits
Supplies & Other
Capital Outlay
13
EXPENDITURES BY FUNCTION
2007-08 General Fund Budget
20%
11%
2%
0%
14%
26%
13%
14%
EL Instruction
HS Instruction
Pupil & Staff Services
Intergovernmental Transfers
MS Instruction
Other Instruction
Support Services
Transfers
14
BUDGET FACTORS
• Foundation Allowance
• Wages/Benefits
• Retirement Rate
• Students - Enrollment
15
BASE FOUNDATION
Year
2003 2004 2005 2006
2007
2008
$ Increase $192
$0
$0
$175
$210
$48
% Increase 1.9%
0
0
1.7%
1.7%
.4%
0
0
0
?
MID-YEAR
REDUCTION
($59) ($74)
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Percent
Farmington Public School District
Cumulative Rate of Inflation vs Percent Increase
Per Pupil Foundation Funding 1993/94 to 2007/08
38
36
34
32
30
28
26
24
22
20
18
16
14
12
10
8
6
4
2
0
Rate of Inflation
Percent Increase
93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08
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Retirement Rate History
Fiscal
Year
Retirement
Rate
$
Total
Retirement
Expenditures
% of Expend
2008-09*
16.54
14,466,652
152,201,667
9.50%
2007-08
17.00
14,618,703
150,741,462
9.70%
2006-07
17.74
15,936,633
155,815,010
10.23%
2005-06
16.34
14,470,279
153,140,544
9.45%
2004-05
14.87
12,756,878
146,693,465
8.70%
2003-04
12.99
11,011,128
137,946,733
7.98%
2002-03
12.99
10,364,921
129,322,464
8.01%
2001-02
12.17
9,749,551
135,120,933
7.22%
2000-01
12.16
9,457,888
130,635,736
7.24%
1999-00
11.66
8,932,394
126,818,259
7.04%
1998-99
10.77
7,786,855
116,191,697
6.70%
1997-98
11.12
7,689,843
110,976,962
6.93%
*Estimated
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Enrollment History
Year
February
September
Blended Blended
Change
Feb to Sept
Change
Sept to Feb
Change
2002/03
12,171
12,204
12,197
(12)
33
(85)
2003/04
12,136
12,322
12,285
88
186
(68)
2004/05
12,257
12,355
12,331
46
98
(65)
2005/06
12,296
12,380
12,359
28
84
(59)
2006/07
12,344
12,210
12,244
(115)
(134)
(36)
2007/08
12,199
12,222
12,217
(27)
23
(11)
2008/09
12,062
(124)
-
-
2009/10
11,976
(86)
-
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Enrollment History
Blended Percentages
February
September
1994 – 1995
50%
50%
1995 – 1996
50%
50%
1996 – 1997
50%
50%
1997 – 1998
40%
60%
1998 – 1999
40%
60%
1999 – 2000
25%
75%
2000 – 2001
20%
80%
2001 – 2002
20%
80%
2002 – 2003
20%
80%
2003 – 2004
20%
80%
2004 – 2005+
25%
75%
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FARMINGTON PUBLIC SCHOOLS
BUDGETED FOR 2007/08 AND 4 YEAR FORECAST
2007/08
2008/09
Revenue
154,457,280
150,864,330
Expenditures
150,741,462
2010/11
2011/12
150,301,780
149,600,532
148,916,618
152,201,667
156,569,885
159,700,955
162,117,542
3,715,818
(1,337,337)
(6,268,105)
(10,100,423)
(13,200,924)
Beginning Fund Balance
UNRESERVED
24,050,480
27,766,298
26,428,961
20,160,856
10,060,433
Ending Fund Balance
27,766,298
26,428,961
20,160,856
10,060,433
(3,140,491)
18.42%
17.36%
12.88%
6.30%
-1.94%
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11
(3)
Shortfall
% of Total Fund Balance
Days of School
2009/10
21
Fund Balance (Deficit) (Millions)
Projected Unreserved Fund Balance
$40.0
$35.0
$30.0
$25.0
$20.0
$15.0
$10.0
$5.0
$0.0
($5.0)
$34.8
$31.1
$32.9
$27.8
$26.4
$24.0
$26.4
$20.1
$10.1
($3.1)
2002- 200303
04
2004- 200505
06
2006- 200707
08
2008- 200909
10
2010- 201111
12
Fiscal Year
22
Reasons for a Fund Balance
• To smooth State Aid “Take Backs”
• Federal/State Legislative Action
• Assists in offering a continuous program,
avoids knee jerk reactions
• Emergency Expenditures
• Sound Fiscal Management
• Cash flow
• Interest Earnings
23
Reasons for a Fund Balance
• Uncertainty of Revenues and Revenue
Stream
• Unanticipated Expenditures
• Auditor Recommendation
• Budget Stabilization
24
2008/09 STATE BUDGET
• Legislature is currently working on their
side of the proposal
• In the past not voted until well after our
school year has started
• Current vote is on a $71 per pupil increase
(.7%)
• Dividing higher foundation districts
25
What Have We Done in the Past?
• Reduced $33 million – tightened our belts
– Includes 225 Positions
– See Website for Detail Listing of the Past
Years’ Reductions
– Budget Work Groups Submitted Reports
– Conscious Effort Toward Three Areas:
Revenue Enhancements, Efficiencies and
Cost Reductions
– Staff/community suggestions on website
26
What is the District doing now?
• Tying goals of Budget Committee to
Farmington Forward goals
– Creation of a Proactive Financial Model
– Learning Configurations and Facilities
Committee
• Addition of all day kindergarten to
assist with student achievement
27
What Can You Do?
• Become informed on what the
District has done to date and will
continue to do
• Contact the Governor/Legislature
to share your concerns about
funding
28
Important Dates
• Presentation of budget document
5/20/08
• Public hearing on budget and tax
levy 6/3/08
• Adoption of 2008/09 Budget –
6/17/08
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Questions and Suggestions
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