Presentation on theme: "EDFA 60800 BUSINESS MANAGEMENT IN EDUCATION Dr. Mark Sperling Kimberly J. Cummings November 23, 2013 CAPITAL FUNDING CLARK-PLEASANT COMMUNITY SCHOOLS."— Presentation transcript:
EDFA 60800 BUSINESS MANAGEMENT IN EDUCATION Dr. Mark Sperling Kimberly J. Cummings November 23, 2013 CAPITAL FUNDING CLARK-PLEASANT COMMUNITY SCHOOLS
INEQUALITY OF PROPERTY TAXES WHICH AFFECT SCHOOL CAPITAL PROJECT FUNDS Indiana public schools are enduring existing and possibly future substantial revenue challenges. The state of Indiana has had recent budget reductions. The property tax caps as well as the 35% supplemental Homestead Credit, has reduced net assessed valuations. The result is that there are decreased property-tax-supported school corporation funds. In addition to the State budget cuts, schools’ Capital Project Funds began being negatively impacted by the Homestead Credit. Most revenue reductions range from 10% to 20%, with further reductions possible from State property tax caps. These reductions have affected some schools to the extent that they are being forced to make difficult choices within their Capital Project Funds. Clark-Pleasant Community School Corporation (CPCSC) in Johnson County, Indiana is no exception. The school district along with many others are becoming more creative in how they budget. CPCSC is a suburban school district that has very few businesses in comparison to the number of residing citizens, most of which are median level income families. It abuts six different school districts, most of which have several large businesses, lower property taxes, and wealthier residents that help alleviate their taxpayers’ burdens. Unfortunately, CPCSC has higher property taxes due to the lack of major revenues from businesses.
HOW INDIANA'S SCHOOLS ARE FUNDED Indiana’s state funding formula determines how much money the state gives to each school corporation. Each district receives a minimum amount of $4,280 per enrolled pupil. (Kindergarteners are counted as half a student.) Average daily membership (ADM) is determined by a single-day head count. ADM isn’t a measure of attendance — kids who are absent on count day are still included in the district’s total enrollment. The formula is changed and modified during the legislature’s biannual budget process. Additional funds are distributed based on the number of students who receive free and reduced-price lunches, students who graduate with honors and students who have disabilities. The legislature has eliminated a number of funding programs, including additional grants for small school districts and K-3 students. Schools may no longer spread out any loss of funding due to declining enrollment over three years.
CAPITAL PROJECTS FUND Permitted Uses of the Capital Projects Fund Plan The Capital Projects Fund Plan allows for expenditures in the following categories: 1)Land Acquisition and Development 2)Fees for Professional Services 3)Educational Specifications Development 4)Building Acquisition, Construction, and Improvement A.Purchase and construction of buildings B.Improvements or alterations to existing buildings C.Installation or extension of service systems for new or existing buildings D.Building sites for use by the school corporation E.Purchase of building materials for vocational building and trade classes 5)Rental of Buildings and Equipment 6)Purchase of Mobile or Fixed Equipment 7)Emergency Allocation 8)Utility Services 9)Maintenance of Equipment 10)School Sports Facilities 11)Property or Casualty Insurance 12)Other Staff Services 13)Technology 14)Allocation for Future Projects
CAPITAL PROJECTS FUND GUIDELINES IC21-2-15 authorizes the Capital Projects Fund No. 035 School corporation expenditures in a calendar year may not exceed five percent (5%) of the property tax revenues levied for the fund in a calendar year In Indiana, the statutory maximum tax rate that can be charged for Capital Projects Fund is $.4167 per $100 of assessed valuation
EMAIL INTERVIEW “Unlike the other governmental funds, the Capital Projects Fund operates on an appropriation plan by project basis rather than an appropriation plan for a particular year. Monies are appropriated in a particular year for a project that may take several years to complete. Capital project appropriations are carried over into subsequent years, unlike other funds. Additionally, the Capital Projects Fund has a tax rate cap, which varies from school district to school district depending upon assessed valuation. The CPF tax rate cap for Clark-Pleasant Community School Corporation is approximately $0.3414.” Steven Sonntag Director of Business Clark-Pleasant Community School Corporation
The Clark-Pleasant Community School Corporation currently operates the following facilities: PRESENT FACILITIES
CIRCUIT BREAKERS Designed so the property taxes of people with low incomes will not exceed a portion or percentage of their annual income regardless of the value of their assessed property. May include relief of taxpayers 65 years old and older, widows and widowers, and those with limited incomes. Determining how to apply welfare recipients and renters income is a difficult problem for state in applying the tax relief. Homestead exemptions reduce property taxes by lowering the assessed value of the principal residence.
CIRCUIT BREAKER (CPCSC) County Wide Totals 1% Homestead Circuit Breaker Credits 2% Circuit Breaker Credits 3% Circuit Breaker Credits Over 65 Circuit Breaker Credits COUNTY WIDE GRAND TOTAL $ 5,644,639.06$ 6,194,370.38$ 2,366,036.12$ 154,875.32$ 14,359,920.88 JOHNSON COUNTY UNIT UNIT TYPE FUND FUND CODE CERTIFIED RATE ABSTRACT NET ASSESSED VALUE CIRCUIT BREAKER CREDITS ABSTRACT LEVY EXEMPT CLARK-PLEASANT COMMUNITY SCHOOL CORPORATION SCHOOL $ 1.9666 $ 3,378,186.20$ 16,859,849.53 DEBT SERVICE0180$ 1.2894$ 1,029,004,062.00$ 2,214,905.57$ 11,054,149.31No SCHOOL PENSION DEBT0186$ 0.0561$ 1,029,004,062.00$ 96,367.46$ 480,950.66No CAPITAL PROJECTS (School) 1214$ 0.3357$ 1,029,004,062.00$ 576,658.75$ 2,877,988.15No TRANSPORTATION6301$ 0.2765$ 1,029,004,062.00$ 474,966.18$ 2,370,460.88No BUS REPLACEMENT6302$ 0.0089$ 1,029,004,062.00$ 15,288.24$ 76,300.53No Whiteland Warriors
COMPARISON TO AN ABUTTING WEALTHIER DISTRICT UNIT UNIT TYPE FUND FUND CODE CERTIFIED RATE ABSTRACT NET ASSESSED VALUE CIRCUIT BREAKER CREDITS ABSTRACT LEVY EXEMPT CENTER GROVE COMMUNITY SCHOOL CORPORATION School $ 0.9910 $ 462,931.13$ 20,378,674.16 DEBT SERVICE0180$ 0.5079$ 2,102,890,927.00$ 237,258.04$ 10,444,327.56No SCHOOL PENSION DEBT0186$ 0.0423$ 2,102,890,927.00$ 19,759.83$ 869,846.53No CAPITAL PROJECTS (School) 1214$ 0.2693$ 2,102,890,927.00$ 125,799.55$ 5,537,817.31No 2013 State General Fund Loan Repayment 2083$ 0.0119$ 2,102,890,927.00$ 5,558.91$ 244,708.60No TRANSPORTATION6301$ 0.1324$ 2,102,890,927.00$ 61,848.72$ 2,722,640.21No BUS REPLACEMENT6302$ 0.0272$ 2,102,890,927.00$ 12,706.08$ 559,333.95No Center Grove Trojans
Something has to be done to provide a more equitable formula for funding schools to ensure that all taxpayers are paying rightful amounts. It is unfair that residents in a medium to low income school district have to pay higher taxes than residents with medium to high level incomes who live in school districts with several large and small businesses. Technologically advanced communications have resulted in a wider audience, including economists, who now understand more thoroughly the vast differences between funding for school districts. It is extremely difficult for smaller or rural districts to compete with wealthier districts. Every citizen wants the best possible education for students and districts are being forced to become more creative with how they budget. School districts are accountable to the taxpayers who want quality services. This includes providing safe, technologically advanced, aesthetically appealing schools with highly qualified teachers. Students should not receive insufficient educational opportunities based solely upon assessed property values, which is currently the most widely used method of levies for schools.
Schools could expand the capital planning process. The Department of Local Government Finance currently requires schools to prepare a three-year capital planning budget on an annual basis. This could incorporate the Debt Service Fund as part of a master capital plan. NOTE: there is currently a proposed Protective tax levy for next year, which may affect how Indiana schools budget. The Protective tax levy states that school corporations will have to pay their debt first before they can fund other things like transportation, replacing buses, and capital projects which pay for maintenance and technology for schools. A five to seven year budget would identify future capital needs that surpass the capacity of the Capital Projects Fund and allow districts to plan for future funding sources for all improvements. Districts could augment the Capital Projects Fund with a debt service plan, which would allow the district to control its debt service levy. A reassessment of current debt service payments will enable districts to ascertain options for various opportunities to fiscally appropriate funds. Creating a joint capital projects fund and debt service master plan may yield benefits and provide additional funding. The State could revise the formula to include other levies or personal income to make funding more equitable.
WORKS CITED "Bite-Sized Budget Breakdown: How Are Schools Funded?." StateImpact Indiana RSS. N.p., n.d. Web. 16 Nov. 2013.. Brimley, Jr., Vern, Deborah A. Verstegen, and Rulon R. Garfield. Finanacing Education in a Climate of Cha. 11 ed. Boston: Allyn and Bacon Publishers, Pearson Educational Services, 2012. Print. "Department of Local Government Finance." DLGF: Home. N.p., n.d. Web. 18 Nov. 2013.. Dykiel, Thomas. Indiana school finance: a practical approach. Bloomington: authorhouse, 2005. Print. Lewis, Cirsten. Personal interview. 18 Nov. 2013. Principal Sonntag, Steven. Email interview. 31 Oct. 2013. Director of Business "Uniform Compliance Guidelines." The School Administrator 198.June (2012): 1. Print