Budget Hike Still at 3.4 Mills — Could Immediately Be Down to 2.4 Mills with a Fund Balance Closer to the District’s Policy Target

The budget presented at the most recent School Board meeting (and what’s currently on the CRSD website) showed less of an increase than earlier versions due to lower expenditures, but still showed a millage increase of 3.40 mills.  On a home with an assessment of $35,600 (the median from 2006), that would equate to a tax increase of  $121.04.

Now maybe that doesn’t strike some people as an unreasonable number, but it should be remembered that this is a year when senior citizens received no increase in their monthly Social Security payments.  And there are many other people who received no increase in wages, pensions etc.  So any tax increase should be viewed in relation to that.

I’ve mentioned in earlier posts that the District maintains a fund balance to provide a cushion for unexpected situations.  It is reasonable for one to be maintained, at an appropriate level.  But as I’ve been pointing out for years, every dollar the District holds that exceeds what is necessary and reasonable means a dollar they have taxed people too much.

The School Board has made its own official statement as to what is reasonable (Policy 620), and that is a fund balance of 4% of budget expenditures.  But the 3.40 mill increase results in a budget that would show an ending fund balance of 4.96%, well above what is needed.  In addition, it should be noted that over the past several years (and maybe longer), the actual fund balance at the end of each fiscal year exceeded the projected total, meaning even more was being kept from taxpayers than needed.

The 2009-10 budget called for the fund balance to be $7,396,284 at the end of the fiscal year.  But the 2010-11 proposed budget shows that the fund balance starting the new fiscal year will actually be sitting at $10,944,376. (The separate PSERS fund balance which was supposed to be at $4,439,699 is actually now projected to be at $5,794,045.)

What that means is the District collected almost $5 million more from taxpayers than their own projected fund balance targets. It’s about $3.55 million more in the general fund balance and $1.35 million more in the PSERS account.

So it is not unreasonable to expect that the final fund balance at the end of this year will exceed the projected $9,944,376 and be even higher than the higher-than-policy 4.96% now budgeted.

It’s time for this to stop. The School Board could immediately drop the proposed millage increase by a full mill and still be well in its safety zone for a reasonable fund balance.  Per the budget, a mill is valued at $1,178,030.  So if the tax hike were dropped by one mill, that would be the amount reduced in their projected final fund balance, meaning the projected final figure would drop from $9,944,376 down to $8,766,346.  Based on the expenditure level of the budget, that translates to a final fund balance of 4.37%.  Now that is still a reasonable savings reserve, still comfortably above the policy target, and based on recent trends, it would likely end the next fiscal year even higher than that.

This isn’t a drastic cut to the fund balance, and it isn’t getting it to razor-thin safety levels. It is reasonable.  And it’s high time for the School Board directors to be reasonable in what they keep as a fund balance and what they stop pulling out of taxpayers’ pockets.