Lay Finance Committee Presentation - November 5, 2019
Five-Year Forecast - November 5, 2019
This report was delivered to the CH-UH Board of Education at its work session on May 17, 2016. The report was delivered by Committee Chair Jayne Geneva, who presented on school funding that night along with District CFO Scott Gainer. May 17, 2016 -- Lay Finance Committee carefully considered the parameters of the Five Year Forecast of the district’s finances in light of what we know about state funding currently. We also tried to protect the district against the unknowable at this point in time. Considering our discussion, we know that school district levies are expected to last about 3 years. Our last levy was 5 years ago! Our administrators and school board members have tightened the belt to make the levy last for 5 years instead of the planned three years. The Committee sees the necessity for a November 2016 levy—monies of which are not collectable until 2017—to continue maintaining our current education programs. In looking at models for future funding of our district, we considered three possibilities.
a) Waiting until 2017 to place a levy on the ballot
b) Trying to establish a 4-year levy cycle
c) Placing a levy on the ballot in the fall of 2016, collectible in 2017. (Which is our recommendation)
a) Looking at the projections, a levy delay until 2017 will mean we need an 11.8 mill levy to cover the same expenses we could now with 5.5 mills. We are also concerned about waiting until 2017 because there are so many uncertainties on the political funding landscape. Should the state guarantee—as has been promised—be eliminated, we would lose millions of dollars. Should the depression of real estate values continue, we would not even reap the same amount of tax dollars we currently are receiving.
b) Trying to establish a 4-year levy cycle in 2016 with an 8.5 mill levy would allow us to conceivably have a 4-year levy cycle, but we would be taking many chances with the budget given that 4-year period of time. There are many uncertainties of state funding. The Committee felt trying to project out 4 years would be taking too big a risk. Our funding might increase from the state, but more likely it would be cut. Just review the funding losses in the last six years. The district would have better control over programming and personnel with a levy in 2016.
c) A levy in the fall of 2016 would not be collectable until 2017. A 5.5 mill levy should enable us to accommodate slight inflationary increases without large budget cuts. Since the district cut $5 million out of the budget last year alone, we believe it is necessary to maintain at least our current programs.
The 5.5 mill levy provides no cushion in FY 2019, not even one month’s payroll, which is what we traditionally have felt is necessary. The school district, it should be noted, has no rainy day fund like the state has created. The Committee recommends 5.5 mills as the minimum. We have taken into consideration the desires of the community not to raise taxes more than necessary to maintain what we currently have.
So, considering all the assumptions of the forecast, the political uncertainties, and the need to continue the basic services we provide for our students, the Committee recommends the Board place a 5.5 mill levy on the ballot this November 2016.