School Department |
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Why the 2008 Dunbarton School budget and projected revenues will be so different from last year
Since the posting of our proposed budget and projected revenues in the town, many questions have arisen relative to the potential school tax rate and the drop in predicted revenues for the current year. How will this affect the tax rate for the year 08-09? Why are our revenues down so much?
The School Board and the Administration worked diligently and long to bring an operating budget to the townspeople that increases only $57,170 over the year 07-08. This proposed Operating Budget represents a potential tax rate of $12.36 per thousand of assessed valuation when figured on the latest anticipated town assessment of $331 million plus, obtained from the Town Offices in February of 2008. Please keep in that mind this number represents the cost for the Operating Budget only. A separate warrant article for a 3-year teacher contract, if passed, would add an additional $56,731 to the Operating Budget and $.17 to the tax rate.
The effect that revenues have on the potential tax rate will now be addressed. Revenue is an area where the School Board has very little influence. Revenue, or income, is primarily from State and Federal sources but includes others such as Food Service, which is self-supporting, or the sale of Bonds or Notes. For 08-09, the proposed income has been prepared as an estimate by the Supervisory 19 Office from submitted billings and budgetary expenditure reviews. At this time, total revenues are predicted to be $766,476 lower that those received in 07-08. This decrease is the cause for concern.
There are several reasons for this decrease. Revenues from state sources include Catastrophic Aid which is down $14,500, Building Aid is down $14,905, and the unreserved fund balance is estimated at $110,000, which is $736,571 lower than 1 year ago where it was $846,571. Should the revenues listed in the above areas remain at these levels, the projected property school tax could increase by an additional $2.41. If the State Funding remains at the same level as in 07-08, then the rate will be $2.22. It is understandable why people are asking questions about the unreserved fund balance difference. Please note that an $800,000 fund balance is very rare.
The reason for the large difference in unreserved funds from the previous year occurred for several of the following reasons. In 06-07, the total school district budget was $5,248,983, which included $525,000 from the sale of a Building Bond for Phase 2A/2B HVAC renovation. The total amount spent of this budget was $4,530,512, leaving a balance of $718,471. This difference was placed in the Unreserved Fund Balance along with other income in June of 2007. The combined total was returned to the town 1 year ago at the close of the school year to be used to offset the 07-08 tax rate. The total returned was $846,571. This amount in addition to a flat budget were the reasons for the decrease of $2.53 on your school tax bills in December 2007 to $9.95. The following areas of the 06-07 budget show where the large balances occurred at the end of the school year:
· 1100 Regular Education–down $316,018 primarily in Middle and High School tuition
· 1200 Special Education–down $168,139 primarily due to expected needs that did not occur.
· 2000-2199 Support Services–down $47,084 due to lower need for Special Education Support services such as therapy, speech, counseling etc.
· 2200-2999 Instructional and Staff Services–down $36,427 (includes library, Tech support, Training of staff) due primarily to lower attendance at the HOTS program, staff development, and library needs.
· 2310-2319 Other School Board–down $9,018 includes Board audit, legal fees, treasurer, and District Meeting.
· 2400 Principal Office–down $11,687 primarily due to Health Insurance.
· 2600 Operation and Maintenance of Building–down $44,943 due to lower than planned fuel/electric costs
· 2700-2799 Student Transportation–down $114,833 primarily due to decreased needs for Special Education services.
· 1400 Other Programs (Field trip fees and Assemblies)–down $4,998.
Also included as extra revenue was an increase of $22,376 in the State Adequacy Grant over what we received the year before (05-06)
It is highly unusual to have a total unexpended balance of the size we had for the 07-08 year. As has been presented, the greatest amounts came from Tuition and Special Education overages. We hope this explanation will help you understand how complicated forecasting school operating expenses really is. It is most difficult to estimate costs 4 months ahead of the close of a school year and for the SAU 19 to calculate tuition rates 6 months ahead. In both instances, revenues also are not known for certain until several months after the March School District meeting.
Once all of the projected expenditures have been tallied, time is spent in determining a potential tax rate based on the total of the Operating Budget and any added expenses from Warrant Articles should they be passed. The total revenues are then estimated and applied against the total operating budget. In addition to the revenues already discussed, there is one more source–the State Tax. For 08-09, this is estimated on the town’s total appraisal minus Utilities, which equals $307,200,000. The State Tax calculates out to be $710,494, which is subtracted from the total amount of the operating budget that needs to be raised. The result is a $2.31 State Tax applied to the total school tax bill. When done this leaves the town the balance of $3,327,755 to be raised on the total appraised amount of $331 million plus and results in a school tax rate of $10.05. Adding the two together gives an estimated 08-09 school tax rate of $12.36. This is a potential increase of $2.41 over the current year’s rate of $9.95.
The last item that would need to be added in 08-09, should the 3-year Teacher’s Contract be passed at the March 8, 2008 District meeting, is the first year cost of the proposed Contract. This will result in an additional 17 cents for an estimated total school tax of $12.53. By comparison, the school tax rate for the 06-07 school year, prior to last year, had been $12.48.
The Board would like to remind Dunbarton taxpayers that most of these numbers are estimates at this time and are the best that can be obtained so many months ahead of the end of the fiscal year. The estimated revenues are also contingent on the decisions of the State Legislature, who are considering their education funding plans and a constitutional amendment, which is currently being discussed and voted upon.
Respectfully submitted by the Dunbarton School Board
John Herlihy, Chair
Debra Foster, Vice Chair
Betty Ann Noyes
Rene Ouellet
Carl Metzger
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