Budget FY 2018 Full Budget Report Notice of Hearing. Board of Education August 14, 2017

Transcription

1 Budget FY 2018 Full Budget Report Notice of Hearing Board of Education August 14, 2017

2 A Look Back at FY17 August 2016 Board adopted a $662M Budget Second year of the block grant kept most funding flat $22.7 Million in cuts were necessary to balance budget The Supreme Court decision concerning equity resulted in additional Capital Outlay funding and property tax relief in the Local Option Budget Impact due to the loss of the District s indirect rate was offset by year end cash resulting from savings in utilities and fuel

3 A Look Back at FY17 Fall 2016 The state of Kansas struggled to collect enough taxes to meet revenue estimates and fund its budget In November, the state lowered revenue estimates by about $350 million for fiscal year 2017 There was legitimate concern that the state would either skip or be late with state aid payments, or that the Governor might reduce funding to schools through the allotment process

4 A Look Back at FY17 Jan-Feb 2017 Instead of allotments, the Governor submitted a budget plan to the 2017 Legislature which included internal borrowings, selling the tobacco settlement, increasing consumption taxes and delaying KPERS payments The Legislature, facing a $280 million shortfall for 2017, began its work on taxes, budget and a school finance formula Serious discussions concerning mid-year cuts were occurring, with cut possibilities for the District ranging from lows of $5 million to highs of $15-$20 million The state fails to pay the third KPERS payment

5 A Look Back at FY17 Mar-Apr 2017 In March 2017, the Supreme Court ruled that the block grant was unconstitutional as to adequacy, solidifying the need for the Legislature to develop a formula that would meet constitutional standards of adequacy and equity The threat of mid-year cuts diminished, but with no movement occurring on the formula, taxes or the budget, and no estimates of how much new funding would be available for FY18, plans were made to use year end cash to cover some FY18 costs if necessary Concerns for a shutdown became a real possibility The state missed the fourth KPERS payment

6 A Look Back at FY17 May-June 2017 Concerns for a possible shutdown continued. On May 30, 2017, the Legislature passed a new school finance formula, signed by the Governor on June 15 The formula, known as SB 19, was sent to the Supreme Court for review Lawmakers overrode the Governor s veto of a tax plan estimated to bring the state $1.2 billion over two years SB 19 provided for almost $300 million in new funding to schools for FY18, but the question of adequacy remained

7 A Look Back at FY17 End of June On June 19, 2017, the Supreme Court held that SB 19 would be allowed to become effective July 1, finally ending the immediate threat of a school shutdown The state does pay most of one of the two missed KPERS payments Budget priorities for FY18 were presented to the Board on June 29 As expected and as discussed in April during times of uncertainty, the District did end the FY18 budget cycle with year end cash Year end cash was put into funds to use for nonrecurring expenditures: textbooks, technology, professional development, contingency reserve

8 Contingency Reserve July 1, 2013 $14,873,751 July 1, 2014 $14,873,751 July 1, 2015 $13,122,327 July 1, 2016 $10,122,327 July 1, 2017 $14,873,751 Contingency Reserve back to a pre block grant level, which would cover about 8 ¼ days operating expenses Gives BOE flexibility to keep mill levy flat

9 FY18 Budget Priorities Recruitment and Retention through Compensation At risk programs, including those to increase graduation rates Enrich Parents as Teacher program Curriculum and Textbook needs Student Technology Deferred Maintenance needs Pre K expansion Professional Development Expand Technical Education Strengthen STEM and other academic programs Career and Academic Counselors working with Students towards Individual Plans of Study Continue work with Student Social Emotional needs

10 FY18 Overview FY17 Budget to FY18 Budget FY 17 Net Budget (After Transfers) FY 18 Net Budget (After Transfers) $682.6 Million $662 Million Increase of $20.6 M

11 State Aid Comparison FY17 Budget FY18 Budget Increase (Decrease) General State Aid $282,193,236 $306,302,556 $24,109,320 (includes weightings) Special Ed $ 44,623,547 $ 44,744,673 $ 121,126 State Aid Local Option State $ 60,417,935 $ 58,713,982 $ (1,703,953) Aid KPERS State Aid $ 39,346,728* $ 43,854,601 $ 4,507,873 Capital Outlay State Aid $ 9,434,110 $ 9,651,511 $ 217,401 Bond & Interest, CTE, $ 17,626,468 $ 18,000,322 $ 373,854 PD Total State Aid $453,642,024 $481,267,645 $27,625,621 *The state only made partial KPERS payments in FY 17

12 FY18 New Funds Available General and Weighted Funds Local Option Taxes & Cash C/O Local Option State Aid Contingency Transfer Total Funds Available* Less: Fixed Cost Increases Funds Available after Fixed Costs FY17 FY18 Increase (Decrease) $282,193,236 $306,302,556 $24,109,320 $ 50,951,530 $ 54,823,335 $ 3,871,805 $ 60,417,935 $ 58,713,982 $ (1,703,953) $ 2,000,000 $ 2,000,000 $393,562,701 $421,839,873 $28,277,172 ($8,200,000) $20,077,172 Excluding KPERS, Capital Outlay, Bond & Interest, and SPED

13 FY18 Minimum Needed to Balance Budget Expenditure Budget Increase Needed Continued Funding of Step & Track Given in (previously funded with one time money) $ 4,750, Utilities $ 500, Transportation $ 500, Software $ 1,000, Fuel $ 350, Property Casualty $ 500, High Needs Enrollment $ 600, Total $ 8,200,000.00

14 FY18 Comparisons to FY17 Will Be Difficult! Changes due to moving from the Block Grant to a formula with weightings KPERS no longer passes through the General Fund in FY18 There were only 3 KPERS payments in FY17 The District totally restructured the At Risk fund, causing budget positions to move between At Risk and General Fund The District is budgeting year end cash in FY18 expenditures The Indirect Rate was 0% for FY17 but has increased to 1.33% in FY18

15 FY18 Proposed Mill Levies Based on Estimates Mill Levy Projections Actual Estimate General Fund Supplemental General (LOB) * Capital Outlay Bond and Interest Special Liability Total Levy Increase/(Decrease) *LOB state aid is based on last year s LOB.

16 FY18 LOB Mill Levy In the new formula, state aid on LOB is based on last year s LOB, which was $111 million This year s LOB is $115 million. With less state aid, the District would need to raise property taxes to make up the difference Under this proposed budget, to keep mill levy essentially flat in light of a mid year, retroactive income tax increase, $2 million in Contingency Reserve is being used to make up the loss in state aid

17 70.00 USD 259 Total Mill Levy Comparison Special Liability (.125 mills 17/18) Special Assessment (.409 mills 15/16) Bond & Interest Suppl. General (LOB) Capital Outlay General Fund Est.

18 FY18 Proposed Area Mill Levies Area Mill Levy Projections Estimate Maize Valley Center Goddard Andover Derby Haysville Newton Wichita

19 FY18 Budget Administration recommends the Board establish 6:00 p.m., August 28, 2017 as the Public Hearing and Budget Adoption for the Budget