The Jefferson City Board of Education approved a $92.7 million budget last week that provides modest raises for employees, expands busing for high school students and maintains a healthy fund balance.
The new budget includes an additional $264,000 for transportation. Currently students who live within a three-mile radius of the high school facilities have to find their own transportation to school, but that will change this fall.
"This will allow us to add four new buses to shrink the radius down to one mile," said Chief Financial Officer Jason Hoffman.
Where does the district's
money come from?
Almost 50 percent of the school district's revenue is provided by local property taxes, Hoffman said. The rest is contributed by the state (23.2 percent), the federal government (9.9 percent), "Prop C" (9.3 percent) and a few other sources.
Hoffman said the timing of the property-tax cycle poses a challenge for his office.
"It's interesting because we have to adopt a budget by June 30 but the clerk doesn't have to report assessed valuation data until July 30," he said.
He estimated the district's total assessed valuation at $1.2 billion, up slightly from last year. The figure assumes $10 million in new construction and personal property, but it also accounts for a $4.6 million reduction due to the removal of equipment from R.R. Donnell and it recognizes that several corporations, including Ameren Missouri, have protested their Cole County property tax bills.
That latter situation is headed for the courts, Hoffman said.
"We've been asked by Cole County to help litigate it," Hoffman said. "Cole County is the largest county affected; Cape Girardeau is taking the lead. There's a meeting scheduled to talk about cost-sharing those legal expenses."
Although this year's budget does include some deficit spending - about $1.4 million - it leaves the district with $19.4 million in cash reserves and isn't built on any levy increases.
The district's operating and debt-service levies, combined together, will remain at $3.6934 per $100 of assessed valuation. The state average is $4.06.
"I talk a lot about the value our taxpayers get and I don't think we get enough credit," Hoffman said.
Ten years ago, he said, more than 44 percent of Missouri's school districts had tax rates higher than Jefferson City's. Now 64 percent do, he said.
One area of the budget that is particularly woeful, Hoffman said, is the interest income the district earns on investments. He budgeted only $336,500, down from $1.7 million eight years ago.
"It's not a pretty picture," Hoffman lamented.
Hoffman said the budget includes a boost in revenues from Prop C, a one-cent dedicated sales tax voters passed in 1982 for education. But he noted on the Missouri Legislature's final day, lawmakers passed several tax cuts that could result "in a potential loss of $900,000 in annual revenue" to the school district.
And, if the district grows with more students, that shortfall could grow.
"We need to be upfront with the Legislature," Hoffman said, adding if sales taxes continue to erode, school administrators may ask the Board of Education to consider raising property taxes to make up the difference.
The district's maximum operating tax rate is currently $3.7642, which is 30 cents higher than the actual levy.
He noted a five-cent increase in personal property tax would net about $900,000.
He also said he's worried that the Legislature is basing it's budget for the schools on unrealistic data. He noted that lottery proceeds were anticipated to grow by 9.3 percent, but they're actually down 3.3 percent this year.
"And they're using similar numbers in the fiscal year 2015 budget," he said. "In my humble opinion, they are using unrealistic numbers in a lot of places."
Board member Doug Whitehead interjected: "So, on the last day they pass tax cuts? Without hearings or floor debate? How are you going to write a budget?"
"Good question!" Hoffman replied.
But on a positive note, state lawmakers approved a 15 percent increase in funding for bus transportation - something they haven't done for years. The decision means $100,000 more for Jefferson City.
Where does the money go?
On the other side of the balance sheet, total expenditures for the district are expected to reach $92.7 million. Of that amount, $4.1 million will be spent on capital projects - such as the renovation of West Elementary School - $3.4 million will be spent to retire old debt and $85.2 million will be dedicated to operate the schools on a day-to-day basis.
Hoffman said the bulk of the school budget - $8 out of every $10 - is spent on salaries and benefits. Even a category that covers "supplies and utilities" includes salaries and benefits for First Student's drivers.
This year's budget includes a 1.8 percent salary increase, on average, for all classes of employees, including teachers.
It also includes salaries for 15 full-time employees, which means a total salary increase of $1.3 million. Those new teachers include: four elementary classroom teachers; three at-risk teachers; three at-risk aides; one social worker; one secondary-level literacy coach; one middle-school athletic director; and two new IT support workers.
Hoffman said the district is expected to break even on nutritional services - which is a big difference from seven years ago when the school supplemented the school cafeterias with an additional $560,000.
"That money can be used in other places," he said.
Among other miscellaneous expenditures:
• The district is also offering new coaching stipends for coaches at the seventh-grade level.
• For the first time, Kelly Education Services, a temp agency, will provide substitute teachers. The change is expected to cost the district about $200,000.
• The district is budgeting an additional 10 percent for utilities - about $1.9 million - but the same amount for supplies - about $8.5 million.
• The focus of the IT department is growing to support the annual purchase and maintenance of computer software. For the first time this fall, every ninth grader will be equipped with a computer tablet. In four years, all high school students will be assigned their own devices.