At the District’s budget workshop last night, the public learned that the proposed 2016/17 tax increase has decreased – the tax increase has reduced from the 4.3% contained in the preliminary budget approved in January. The proposed tax increase is now 3.875%. This ‘decrease in the increase’ means homeowners will keep roughly $20 of the proposed tax increase in their pockets.
T/E School District has one of the largest fund balances in the state – in 1996/97, the District had a fund balance of $4,333,661 and in the last decade we saw the fund balance increase to more than $28 million. The total fund balance as of June 2015 was $32,381,047 – that’s $32.4 million in taxpayer dollars. Continuing to grow the fund balance, the District shows a budget surplus for the fifth year in a row yet residents continue to feel the sting of an annual tax increase.
Ray Clarke and Neal Colligan were in attendance at the budget workshop and their comments from the meeting are appreciated. Thank you both.
If residents care about the proposed ‘thirteen years in a row’ tax increase, they should plan to attend the TE School Board meeting of April 25 and voice their opinion.
Budget Workshop Notes from Ray Clarke:
Three hours of discussion at last night’s TESD Budget Workshop culminated in some good news for taxpayers – although you’d need a microscope to see it. The Board will vote at its April 25th meeting for a “Preliminary Final Budget” that includes a tax increase of 3.875% – down from the maximum allowable by a token 0.4% (worth about $20 for the average taxpayer, who is still faced with an increase of more than $200).
Notwithstanding well-articulated positions from members Dorsey, Sweeney, Burger and Hotinski (and from the audience) for a lower rate, more considerate of the increased fees to families and the fixed, inflation-linked incomes of retirees, the outcome seemed pre-ordained, driven by the same majority that voted for the senseless VFMS fences. That majority seems pre-occupied by risk and unable to appreciate that every number they are given by the Administration is conservative. For example:
– Half of the adjustments to the Preliminary Budget could arguably be higher – most notable being the use of approved rather realistic estimates to budget the impact of staff retirements.
– There was much lamentation of the possible impact of the next union contracts (due in 2017/18), without recognition that the projections already include 7-10% increases in the benefits costs (worth 1-2% in total compensation).
– Revenue projections are especially murky. This year’s transfer tax is already $1 million over Budget, as are even base real estate revenues – the most predictable of all line items! It’s not at all clear if next year’s Budget, developed months ago, considers these developments.
Years of operating outcomes favorable to Budget show that the Administration is skilled at managing its resources. Superintendent Gusick read a scripted plea for the Board to set the District’s tax parameters and pledged to implement a process next Fall to conduct the oft-advertised “deep dive” into expense strategies that would address any apparent operating deficit that resulted.
The April 25th Board vote is not final, but is nevertheless significant. Anyone that believes that our School District should be managed more like the County Intermediate Unit, which also last night presented its Budget and a commitment to live within the Act 1 2.4% Inflation Index, should come out in support of our Board members who are trying to hold the line here in TE
Budget Workshop Notes from Neal Colligan:
-Current Year operating projections now show an estimated $984,000 Surplus for the District for the 2015-16 fiscal year (this year). Current year’s budget was passed with an anticipated deficit of $1.654 MM. It’s a miracle…a $2.5 MM swing!
-This “miracle” of Deficit Budget morphing into an Actual Surplus has now happened in EACH of the last five years.
-As a result of these Surpluses; the District has added almost $12 MM to its Fund Balance over the last 5 years…that’s a pretty profitable operation!!!
-With over $32 MM in Fund Balance (about to be over $33 MM with this year’s Surplus); at what point is that adequate?
-The growth of the Surplus is remarkable as we always seem to be “up against the wall” when it comes time to set a new tax rate. Possibly this pattern is a result of the budget forecasting methods employed when looking at the next year’s budget. On average (10 years); the District collects a bit over 100% of budgeted revenue and spends about 95.5% of budgeted expenses. Perhaps this speaks more to the budget estimates used at tax setting time than actual operational changes employed during a given fiscal year.
-At 3.875%; the tax increase this year will be higher than the 3.84% increase imposed on the community for this year. Not sure the new Board Members ran to increase taxes.
-Perhaps it is time to look at using a small amount of our Surplus (88% funded by local sources) to dampen current tax increases? One could certainly argue that the Fund Balance is now super-adequate and it is taxpayer money that they were told would go to education….!!!???