FY 2019 HUSD #3 BUDGET PROPOSAL SUMMARY

Transcription

1 FY 2019 HUSD #3 BUDGET PROPOSAL SUMMARY 1

2 What is the purpose of a proposed budget? The intent of a proposed budget is to provide an estimated budget for the Holbrook School District for the upcoming fiscal year. The budget is built upon designated formulas set by the Arizona Department of Education; as well as, budget priorities for the district in order to meet the highest quality academic standards for our district. It is important to note that the Holbrook Unified School District is subject to current year funding in fiscal year Current year funding funds school districts based on current year enrollment. HUSD #3 s first state aid payment in August will be determined from prior year numbers and subsequent payments will be determined from real, current year student counts the remainder of the year making funding contingent upon daily and monthly enrollment counts. What are the budget timelines for adoption? June 2018 Proposed budget adopted by the Governing Board The proposed budget must be posted on the ADE website for 10 days. By July December 2018 Public hearing to take comments on the budget, followed by Governing Board adoption of the FY 2019 HUSD #3 If required/necessary, Budget Revision #1 presented to the HUSD #3 Governing Board for approval, additional revisions can be made through May of 2019 as needed and approved. What funding sources are being approved in a budget? State Aid Federal Aid Local Taxes State aid is generated from student enrollment and is funded by state revenue including sales tax, property tax and income tax. Federal aid is generated from Federal funding including Impact Aid, Title I funding, Federal Grants, etc. Local property taxes generate funding for areas such as bonds, overrides, and general M & O budget capacities How do we know how much money to propose? We utilize our state budget limit formulas, student count, salaries, benefits, program costs, cash balances, entitlement funds, property tax rates, and various other resources to determine the estimated funds it will take to operate our school system for the upcoming year. 2

3 Key definitions for budgeting: Maintenance and Operations Budget (M & O)- this is the budget comprised of the Base Support Level (BSL), Transportation Control Limit (TRCL) and the District Additional Assistance (DAA). These three revenue sources are formula driven and make up the budget authority for the M&O budget. This budget is used for day to day expenditures including salaries, benefits, supplies, utility costs, maintenance costs, etc. Current Year Funding- The process by which a district s funding is determined based on student enrollment during the current fiscal year rather than the enrollment of the prior year. Base Support Level (BSL)- the base level support is factored by equating the weighted student count X base level amount X teacher experience index. Weighted students students are weighted based on their grade placements, special education categories, and the size of school they attend. Teacher Experience Index (TEI)- the teacher experience index weights the formula based on the average years of experience of the district s teaching staff due to higher salary rates. Base Level Amount the funding amount per student, set annually be the state legislature. Transportation Support Levels (TSL)- the TSL is based on the average daily route miles per student. We use the prior year s route mileage to calculate this allocation. Transportation Revenue Control Limit (TRCL)- the TRCL is the total amount of funding received from the mileage reimbursed based on yearly route mileage. Revenue Control Limit (RCL)- the RCL is our spending limit based on adding the base level support (BSL) to the transportation revenue control limit (TRCL). District Support Level (DSL)- the DSL is the portion of funding that is eligible for state equalization funding due to offsets in tax bases. District Additional Assistance (DAA)- This is a per pupil weighted allocation that can be used to support M & O general expenses or used to fund capital purchases including technology, textbooks, salaries, pupil transportation vehicles, furniture, equipment, etc. Override an override allows a district to increase its budget capacity by up to 15% of its RCL if voter approved. These funds can be used for basic operational expenses. Budget Balance Carry Forward The unexpended portion of the prior year s budget that is brought forward to the new fiscal year. In prior years this amount was limited to 4%, new in 2017 there is not limit. Desegregation Budgets this is additional budget capacity for a district to comply with or maintain activities related to a court ordered desegregation agreement with the US Office of Civil Rights. Desegregation budgets are funded by local tax rates. 3

4 Key definitions for budgeting: (continued) State Equalization Assistance a finance formula that attempts to ensure each district in the state has equitable budget capacity compared to other districts in the state. The equalization assistance is the money that the state provides over and above the uniform Qualify Tax Rate (QTR). It basically allows additional funding if the local budgets do not have enough revenue to provide an equalized formula of funding. HUSD #3 qualifies for state equalization assistance. Unrestricted Capital Outlay generally budgeted for the acquisition of items with a life of more than one year and valued at more than one thousand dollars including land, buildings, furniture, athletic items, equipment, transportation vehicles, instructional aids, etc. Capital funds are allocated through District Additional Assistance. Federal Projects federal projects are federal funds allocated to the school district to provide supplemental education for students. This includes Title I, II, III, and VII grants, Johnson O Malley funding, and other special grants that are applied for through the federal government. Budget Limits this is the budget authority given to the district based on the formulas provided by the state for budget capacities. Impact Aid- Many local school districts across the United States include within their boundaries parcels of land that are owned by the Federal Government or that have been removed from the local tax rolls by the Federal Government, including Indian lands. These school districts face special challenges they must provide a quality education to the children living on the Indian and other Federal lands and meet the requirements of the Elementary and Secondary Education Act of 1965 and the updates of this legislation (i.e. NLCB, Race to the Top, Every Student Succeeds Act) while sometimes operating with less local revenue than is available to other school districts, because the Federal property is exempt from local property taxes. Since 1950, Congress has provided financial assistance to these local school districts through the Impact Aid Program. Impact Aid was designed to assist local school districts that have lost property tax revenue due to the presence of tax-exempt federal property, or that have experienced increased expenditures due to the enrollment of federally connected children, including children living on Indian lands. The Impact Aid law (now Title VIII of the Elementary and Secondary Education Act of 1965 (ESEA)) provides assistance to local school districts with concentrations of children residing on Indian lands, military bases, low-rent housing properties, or other federal properties and, to a lesser extent, concentrations of children who have parents in the uniformed services or employed on eligible federal properties who do not live on federal property. Nearly 92 percent of the $1.19 billion appropriated for FY 2003 was targeted for payment to school districts based on an annual count of federally connected school children. Slightly more than 5 percent assists school districts that have lost significant local assessed value due to the acquisition of property by the Federal Government since Slightly less than $27 million is available for a competitive discretionary construction grant program for which certain Impact Aid-eligible school districts can apply. 4

5 Key definitions for budgeting: (cont) The Impact Aid law (now Title VIII of the Elementary and Secondary Education Act of 1965) has been amended numerous times since its inception in The program continues, however, to support local school districts with concentrations of children who reside on Indian lands, military bases, low-rent housing properties, and other federal properties, or who have parents in the uniformed services or employed on eligible Federal properties. The law refers to local school districts as local educational agencies, or LEAs. Impact Aid is a fluid funding sources; however, allocations are contingent upon the federal budget and current year funding; therefore, funding is subject to reduction. How do school districts use Impact Aid? Most Impact Aid funds, except for the additional payments for children with disabilities and construction payments, are considered general aid to the recipient school districts; these districts may use the funds in whatever manner they choose in accordance with their local and State requirements. Most recipients use these funds for current expenditures, but recipients may use the funds for other purposes such as capital expenditures. Some Impact Aid funds must be used for specific purposes. All payments are distributed by wire transfer directly to the bank accounts of school districts. School districts use Impact Aid for a wide variety of expenses, including the salaries of teachers and teacher aides; purchasing textbooks, computers, and other equipment; after-school programs and remedial tutoring; advanced placement classes; and special enrichment programs. Payments for Children with Disabilities must be used for the extra costs of educating these children. 5

6 GENERATING REVENUE 6

7 Basic Revenue Information Student Accounting School district revenues are largely formula driven and at the center of the formulas are students. State funding is calculated using Average Daily Membership (ADM). The accuracy of student accounting is critical to the funding of the district Holbrook USD#3 will utilize a new student management system, Infinite Campus, for the school year. Impacting the budget process is Current Year Funding in which a district must forecast and estimate enrollment for the upcoming school year. Estimates are reconciled and adjustments made throughout the year, as necessary (more money allocated in the event of an underestimate or funding reduced if over estimated). Average Daily Membership (ADM) ARS defines ADM as the total enrollment of fractional students and full time students, minus withdrawals, of each school day through the first one hundred days or two hundred days in session as applicable for the current year. ADM = (FTE x Membership Days) / 100 Example: A full time student is equal to 1.00 full time equivalency (FTE). If this full time student was enrolled in a school within the district for the first 100 days the equation would look like this: (1 FTE x 100 Membership Days) / 100 = 1 ADM. Absences are only considered if excessive and met a set threshold (10 day drops). Un-Weighted vs. Weighted ADM Each and every student is counted once according to their FTE and total membership days this represents the un-weighted student count ADM (see above). Each of these full time equivalent students are weighted according to grade level placements this represents the weighted ADM Enrollment Estimates: HUSD#3 ADM Preschool +/- Prior Year* *2018 ADM K-8 +/- Prior Year /- Prior Year Un-Weighted Weighted , Student Count Add-ons or Group B Add-ons The state realizes that students with particular needs require additional funding to provide an equal education. Students who meet these qualifications are counted more heavily in the funding formula. A multiplier is applied to their ADM to create a weight factor. For instance a student with hearing impairment is multiplied by and a student in grades K-3 are multiplied by These adjustments are referred to as Group B Add-ons or Student Count Add-ons and are added to our student count (see budget worksheet page 3 of 15). HUSD#3 Group B Estimated Add-ons = This is largely made up of students in our special education population. 7

8 Basic Revenue Information Funding Funding Formula The funding formula provided by the state takes our Weighted ADM and multiplies it by the Base Support Level which for Fiscal Year 2018 has been set at $4, (Weighted ADM + Group B) x (BSL) = Revenue Control Limit (RCL) (2, ) x ($4,009.57) = $9,920, (RCL) The Revenue Control Limit is combined with funding for Audit Services and Teacher Experience Index (TEI), Transportation Control Limit (TRCL), District Additional Assistance (DAA), Override Assistance, Desegregation Funds, Budget Balance Carry forward, and other miscellaneous revenues to get our General Budget Limit (GBL). ESTIMATED BUDGET CAPACITIES FOR FY 19 $9, Base Level Support + $ 397,988 Teacher Experience Index (TEI) & Audit Services + $3,208,555 Transportation Revenue Control Limit (TRCL) + $ 322,485 District Additional Assistance (DAA) + $1,352,710 District Override Assistance + $2,244,998 Desegregation Budget + $ 272,483 Desegregation Capital Budget + $ 190,433 Budget Balance Carry Forward = $17,911,177 TOTAL = General Budget Limit (GBL) Additional funding sources include Proposition 301, Federal Grants, Impact Aid, among others. The general budget authority is used for district-wide expenditures to effectively operate the school district including salaries and benefits, utilities, facility management, supplies and materials. The General Budget Limit from FY2018 to FY2019 has increased $689,863. The increase is result of increases to the Base Support Level and partial restoration to District Additional Assistance. While not explicitly written into law, the legislatures expectation is that a large portion of the increase become increases to teacher salaries. Note: This is a proposed budget and will be revised based on actual revenues throughout the year. 8

9 LOCAL PROPERTY TAXES Est. $3,790,000 ANNUALLY Fiscal Year Combined Primary & Secondary Tax Rate +/- +/- % 1992 $ $ $ % 1994 $ $ % 1995 $ $ % 1996 $ $ % 1997 $ $ % 1998 $ $ % 1999 $ $ % 2000 $ $ % 2001 $ $ % 2002 $ $ % 2003 $ $ % 2004 $ $ % 2005 $ $ % 2006 $ $ % 2007 $ $ % 2008 $ $ % 2009 $ $ % 2010 $ $ % 2011 $ $ % 2012 $ $ % 2013 $ $ % 2014 $ $ % 2015 $ $ % 2016 $ $ % 2017 $ $ % 2018 $ $ % 2019 $ $ % Anticipated tax rates for FY 2019 is at ! WHAT DOES IT COST THE LOCAL TAX PAYER? $50,000 assessed valuation of a home $ / 12 MONTHS = $30.42 PER MONTH HUSD #3 applies approximately $2.5 million per year of Impact Aid to reduce the local tax rate. What does that provide: Public education for our youth Sports and recreation facilities Gardner Performing Arts Center Transportation services for school No fee athletics High quality staff Equipment 9 Textbooks

10 ADDITIONAL REVENUE FEDERAL FUNDS: Approx. $11,500,000 FUNDING ESEA Title I ESEA Title II ESEA Title III ESEA Title VII IDEA Part B Johnson O Malley Vocational Education E-Rate Impact Aid USES Helping Disadvantaged Students Professional Development and Technology Limited English and Immigrant Students Indian Education Special Education Indian Education/Opportunities Career and Technical Education Technology expense reimbursement In lieu of taxes on the reservation STATE GRANTS: Approx. $270,000 FUNDING Vocational Education Academic Contests Indian Gaming City/County Grants Empower Schools USES Career and Technical Education FBLA funds, Academic competitions Instructional Improvement If available Healthy Holbrook *** Federal and State Grants are contingent upon funding and census data for allocations. ADDITIONAL REVENUE FUNDING Daycare Revenue Auxiliary Tax Credits Litigation Recovery Indirect Costs Debt Services Food services Grants Gifts USES PALS Daycare Gate receipts from games Tax credit donors Settlements with companies Costs of managing grants Bonds Cafeteria budgets Technology, Fresh Fruits and Vegetables, etc. Special projects 10

11 Revenues take a similar look each year with approximately 45% coming from both State funding such as equalization and grants and 37% coming from federal sources such as title grants, food service, and impact aid. Locally we generate approximately 15% from property and real taxes and county equalization makes up about 3%. While the values fluctuate each year the percentages remain relatively the same. Local Estimates: 3,800,000 Primary and secondary property taxes to fund GBL &10% M&O Override. Includes NAVIT & misc funding. County $650,000 County School Equalization to fund GBL. State $11,000,000 State Equalization to fund GBL & Includes "state projects" funding. Federal $9,000,000 Impact Aid to fund capital projects, OCR, GBL & other. Includes "federal projects" funding. Total $24,450,000 Estimated total budget authority 11

12 EXPENDITURES 12

13 HUSD #3 PRIMARY RESOURCE PEOPLE! Certified Staff SUPERINTENDENT, PRINCIPAL, ADMINISTRATORS 11 TEACHERS/COUNSELORS/NURSES/SPECIALIST 130 * Note: down teachers due to lack of candidates Support Staff ADMINISTRATION 7 SUPPORT STAFF 12 month 40 SUPPORT STAFF 9 month PLUS EMPLOYEES Doesn t include substitutes and part-time employees This equates to an estimated $15,000,000 in salary and benefits. Some certified staff are funded through M & O, Desegregation, Title I, JOM, Title VII, CTE, etc. Support staff are all funded through M & O. Benefits include: retirement contributions, social security, workman s compensation, medical, dental, life insurance, mid-term disability. TRANSPORTATION HUSD #3 SPANS 1,500 SQUARE MILES. WE TRANSPORT 2,500 MILES PLUS A DAY USING OUR SCHOOL BUSES This equate to an estimated $1,500,000 in transportation costs. CAPITAL COSTS We utilize M & O funds and Impact Aid funding of $300,000-$400,000 per year for textbook updates, computers, etc. We utilize Impact Aid capital for buses $200,000 $300,000 per year M & O SUPPLIES AND MATERIALS We utilize $1,000,000 for supplies and materials for students, teachers, operational costs, etc. each year including paper, glue, pens, hardware, construction materials, gas, diesel, etc. M & O PURCHASED SERVICES We utilize $2,000,000 per year for purchased services, electricity costs, ESI/Smart School employees, professional development, etc. 13

14 During the 2018 legislative session, over 60,000 teacher voiced their concern about the levels of school funding that have been cut since Teachers marched on the Capitol on April 26th and 27th, 2018 in protest of the state budget. Governor Ducey s proposal of a 20% increase in teacher pay by 2020 was enacted into the FY 19 state budget through an increase in the state budget for K-12 education as outlined by the Arizona School Administrator s Association: K12 Budget The FY 19 budget adjusts the base amount, transportation funding amount, and charter additional assistance by 1.80% for standard inflation. Teacher Raises The budget allocates an additional $210 per weighted student count to the base to account for the 10% raise for FY 2019 (1% raise from FY 18 and 9% raise from FY 19). The budget language stipulates that it is the intent of the legislature that the increase to the base be used for teacher salary increases. There is no definition of teacher. Base Formula Amount Base amount FY18 $3, Inflation $66.30 Teacher Salary Increase $ Base amount FY19 $3, Total Increase $ Reporting Requirements The budget language requires school district budget formats to include the average salary of all teachers for the current year and the average salary of all teachers for the previous year, as well as the dollar and percentage increase in the average salary of all teachers employed by the district. It also requires school districts and charters to display prominently on their websites the average salary of all teachers for the current year and the average salary of all teachers for the previous year, as well as the dollar and percentage increase in the average salary of all teachers employed by the district or charter. 14

15 District Additional Assistance The FY19 budget begins a 5 year phase-in of District Additional Assistance funds. $100 million is appropriated in FY19, reducing the cut from $352,442,700 to $257,469,900. An additional $64.3 million is appropriated each year for the following four years. In FY19, school districts with fewer than 1,100 students will be fully restored to DAA formula amounts. Other K12 budget provision $5.3 million ADE IT funding $1 million for Gifted Pupil Funding $1.8 fully fund large JTEDs $51 million for building renewal grant $49.2 million and $36.7 million for new school construction $2.0 million ASDB early childhood intervention $1.6 million ASDB/ADC/DJC teacher pay increase $3 million to AHCCCS Behavioral Health in Schools (7 million federal drawdown) $100,000 to AHCCCS to hire a suicide prevention coordinator that will work with ADE to prevent sui cide. Requires AHCCCS and ADE to submit a report to the governor, president of the senate and speaker of the house, JLBC, and OSPB reporting on the suicide prevention coordinator s accomplishments by September $1 million to ADE for computer science initiative -- ADE distributes grants to school districts and charters to fund quality training for prospective computer science teachers. $100,000 to ADE for Geographic Literacy. Allocates results based funding using the same formula from FY18 based on AzMerit scores (instead of based on A-F ratings). Requires school districts to display on the homepage of its website its individual profile published in the Auditor General Spending Report. As a result of the increase in base level support, HUSD #3 will receive an estimated $527, that can be utilized for teacher salary and benefits. In addition, HUSD #3 will receive an estimated $360,555 in District Additional Assistance to increase salary and benefits for support staff, administration and certified staff that are not considered teachers as outlined by the Proposition 301 definition of a teacher. As a result, HUSD #3 will propose the following salary increases for employees of HUSD #3: Teachers: 1.5% increase to their SY contracts plus an addendum of a flat rate of $2,785. Admin/Counselors: 1.5% increase to their SY contracts plus an addendum of a flat rate of $2,785. Hourly Employees: 1.5% increase to their SY hour rate plus a $1,000 increase (approx..49 cents) * Certified salary placement schedules will be increased $1,500. AVG TEACHER SALARIES WILL INCREASE FROM $50, TO $53,655.34= 6.75% INCREASE 15

16 BUDGET CONSIDERATIONS In reviewing the FY 2019 budget, the following factors guide the budget process: #1 Continue to utilize HUSD #3 Budget Principles: Stepping up efforts & adding programs to attract & retain students Identifying services to be reduced which will have the least impact on classroom instruction Evaluating programs that are very expensive, serve very few students and/or are not part of the core curriculum Cutting costs thru natural staff attrition Requiring current staff to assume additional duties and/ or accept involuntary reassignment Utilizing federal funds & grants to the fullest extent legally allowed 16

17 #2 Utilize student growth/stability as our means for sustaining programs, salaries, and benefits. The amount of revenue generated by each student is set by the legislature each year. HUSD #3 must look at Average Daily Membership (ADM) and Base Level Amount (BLA) trends to set budget capacities. 17

18 #3 - Continue to use Diversity as our Strength District Data 18

19 #4 Stay abreast of federal and state funding volatility. Main areas for budgetary concerns: A. Sequestration: Generally, in U.S. law, sequestration is a procedure by which an automatic spending cut is triggered, first initiated in a federal budget in 1985 by the Gramm-Rudman-Hollings Balanced Budget Act. There have been 5 times in previous history where a sequestration has been triggered, three under deficit targets set by the Gramm-Rudman-Hollings Act and two under other statutory discretionary spending caps. In current discussion, sequestration or the sequester is a term used to describe the automatic budget cuts passed into law under the Budget Control Act (BCA) in August The Budget Control Act contained new agreements on spending levels and the debt ceiling, and created a Congressional Debt Supercommittee (formally known as the Joint Congressional Committee on Deficit Reduction). This Supercommittee, made up of specially appointed members from both the House and Senate on both sides of the aisle, was instructed to cut at least $1.5 trillion from the federal budget. If the Supercommittee failed to present an agreement containing cuts of at least $1.2 trillion over the next ten years, the BCA triggered automatic cuts. The Supercommittee met a number of times but ultimately failed to come to any agreement, citing irreconcilable differences over the issue of whether to reduce federal debt by increasing taxes (raising revenues), or reducing spending. The automatic cuts were designed to make up for the total amount below $1.2 trillion that the Supercommittee failed to cut. Since the Supercommittee recessed permanently in November of 2011 without coming to any agreement, the sequestration cuts are set at $1.2 trillion, spread between January 2013 and October Main budgets affected by sequestration: 1) Impact Aid 2) Title I Projected 5% reduction 3) Title II may be eliminated in Trump s Skinny Budget This would be $200,000 reduction. 4) Special Education funding B. Desegregation: Desegregation funding in Arizona continues to be debated in the state legislature. HUSD #3 has partnered with Tucson Unified, Phoenix Union, Tempe Elementary, Maricopa, Window Rock, Flagstaff and Washington Elementary to submit a Classrooms First Proposal to provide equity funding as part of the state s initiative to revise the current school funding formula. C. Vouchers/Education Savings Accounts/Privatization of Public Money Arizona is a school choice state that has proven to utilize public funding for private school choice. The expansion of voucher systems are putting public funded education in jeopardy. The loss of general tax revenue to fund public education, where every child has the opportunity to attend school, is concerning. The utilization of public funding for private school choice, back pack funding or educational savings accounts reduce the revenue that is available to public schools which jeopardize public school programs that serve every student that attends a public school. 19

20 Federal Funding Decline The Holbrook School District has experienced a rapid decline in federal funding which will impact supplemental services throughout the District. This is of great concern as over 8 employees are funded by federal grants such as Title I. The loss of these funds will have a direct impact on student services to help close the achievement gap amongst our academically and socially at-risk students. Title I funding is utilized primarily to fund the salaries of 6 reading specialists, 1 elementary counselor, after school tutorial, benchmark testing (MAP), BT curriculum that aligns with state standards, and supplemental programs to serve at-risk learners. Title II is utilized to attract and retain highly qualified teachers and leaders. These funds are used for teacher recruitment, mentoring, and professional development. Currently, HUSD is transferring funds from Title II to Title I to sustain Title I programs. 20

21 Federal Funding Decline Title III funds are used specifically for English Language Learners. HUSD #3 serves 70 qualified English Language Learners as identified by AZELLA; although 75% of our students are minority students that have a primary language other than English. These funds are utilized primarily for one on one tutoring. Some capital items such as ipads and Chromebooks are purchased; as well as, supplemental programs and professional development through Title III. The funds for Title III allocate out to $170 per student to overcome language deficiencies. It is estimated by the 2005 Arizona English Language Learner Cost Study that the cost to educate a English language learner ranges between $0 to $4,600. Rural and Low Income Schools funding is utilized for supplemental programs such as character education programs (Bee Kind/PBIS), tutoring, and professional development. The depletion of these funds have limited impact at this point. The per pupil allocation is $4.45 cents. 21

22 #5 Fiscal stewardship is still essential to student success. Putting money in the classroom for students and teachers. Keeping highly effective people. Continuing to Help Unique Students Develop. 22

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