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1 SCHOOL FUNDING FORUM Farmington Public Schools Revenues Expenditures.

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Presentation on theme: "1 SCHOOL FUNDING FORUM Farmington Public Schools Revenues Expenditures."— Presentation transcript:

1 1 SCHOOL FUNDING FORUM Farmington Public Schools Revenues Expenditures

2 2 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

3 3 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

4 4 School Aid Problem (SAF) School Aid Problem (SAF) Economy Shifts in Revenue Sources Less Revenue from the GF Budgeting for items not originally intended for the SAF

5 5 GF Transfer to SAF Fiscal Year$ - Millions 1995$

6 6 How Are Schools Funded? Pre-Proposal A –Local Property Taxes Stay Locally –Sales & Use Tax - 4% (60% to Schools) –Income Tax –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 Repealed

7 7 SOURCES OF 2007 SCHOOL AID REVENUE

8 8 Farmington Schools Funding Pre-Proposal A – –Homeowner Property Taxes – 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 – –Homeowner Prop. Tax – 6 Mills –Hold Harmless Mills –Debt Mills 1.8 Mills –Total Homeowner Mills Reduction of 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

9 9 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)

10 10 Per Pupil Foundation Funding $5,721 $2,067 $2,712

11 11 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

12 12 REVENUE General Fund Budget

13 13 EXPENDITURES BY OBJECT General Fund Budget

14 14 EXPENDITURES BY FUNCTION General Fund Budget

15 15 BUDGET FACTORS Foundation Allowance Wages/Benefits Retirement Rate Students - Enrollment

16 16 BASE FOUNDATION Year $ Increase $192$0 $175$210 $48 % Increase 1.9%001.7%.4% MID-YEAR REDUCTION ($59)($74)000 ?

17 17

18 18 Retirement Rate History FiscalRetirementTotalRetirement YearRate$Expenditures% of Expend * ,466, ,201, % ,618, ,741, % ,936,633155,815, % ,470,279153,140, % ,756,878146,693, % ,011,128137,946, % ,364,921129,322, % ,749,551135,120, % ,457,888130,635, % ,932,394126,818, % ,786,855116,191, % ,689,843110,976, % *Estimated

19 19 Enrollment History YearFebruarySeptemberBlendedBlended Change Feb to Sept Change Sept to Feb Change 2002/0312,17112,20412,197(12)33(85) 2003/0412,13612,32212, (68) 2004/0512,25712,35512, (65) 2005/0612,29612,38012, (59) 2006/0712,34412,21012,244(115)(134)(36) 2007/0812,19912,22212,217(27)23(11) 2008/0912,062(124) /1011,976(86)--

20 20 Enrollment History Blended PercentagesFebruarySeptember 1994 – % 1995 – % 1996 – % 1997 – %60% 1998 – %60% 1999 – %75% 2000 – %80% 2001 – %80% 2002 – %80% 2003 – %80% 2004 – %75%

21 21 FARMINGTON PUBLIC SCHOOLS BUDGETED FOR 2007/08 AND 4 YEAR FORECAST FARMINGTON PUBLIC SCHOOLS BUDGETED FOR 2007/08 AND 4 YEAR FORECAST 2007/082008/092009/102010/112011/12 Revenue154,457,280150,864,330150,301,780149,600,532148,916,618 Expenditures150,741,462152,201,667156,569,885159,700,955162,117,542 Shortfall3,715,818(1,337,337)(6,268,105)(10,100,423)(13,200,924) Beginning Fund Balance UNRESERVED 24,050,48027,766,29826,428,96120,160,85610,060,433 Ending Fund Balance27,766,29826,428,96120,160,85610,060,433(3,140,491) % of Total Fund Balance18.42%17.36%12.88%6.30%-1.94% Days of School (3)

22 22 Projected Unreserved Fund Balance

23 23 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

24 24 Reasons for a Fund Balance Uncertainty of Revenues and Revenue Stream Unanticipated Expenditures Auditor Recommendation Budget Stabilization

25 /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

26 26 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

27 27 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

28 28 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

29 29 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

30 30 Questions and Suggestions

31 31


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