The fall newsletter articles from me and from most business administrators across the state, who do them, is typically about the finalization of the budget and levy for the coming year. In the past few years I’ve deviated to discuss facility needs, safety grants and potential referendums. This year the majority of the newsletter is focused on how the District is dealing with education during the pandemic. I will try to bring some normalcy and tradition to this article and again focus on the budget and levy rather than another article on all the things we work with daily to deal with the pandemic and keeping our students and staff safe. However, even in the budget, you will see that the pandemic is having an impact there.
The biggest and best news that came out of the annual meeting and subsequent finalization of the budget and levy by the Board of Education at the end of October was that our levy mill rate is the lowest it has been in over 35 years. I can track the District levy back to 1984-85. I know levy rates in Wisconsin were historically higher in the 70s and early 80s so I am guessing it may be the lowest for even quite a few more than 35 years. The levy rate of $9.79/thousand of valuation is only the fourth time the District mill rate has been less than $10 in that time. One of those other times was last year with the other two being in the mid-90s.
The proposed Fund 10 budget, the District’s general fund, has a budgeted deficit of $1.4M which is significant. However, in a normal year the District operates with a budget deficit in the $500,000-700,000 range and then relies on bringing expenditures in 1-3% under budget over the course of the year to allow for nearly balanced ending revenues and expenditures by year end. This year though we also had new budgeted expenditures of $1M to address costs related to the pandemic while currently only $245,000 of assistance is expected to be received from the federal government. There is hope that additional federal relief may be adopted. If not, the District will have to utilize some of its fund balance. The primary purpose of the District fund balance is to cover costs and avoid short term cash flow borrowing interest costs due to revenues coming in later in the year than expenditures occur. The other purpose of fund balance is to deal with significant, unexpected items that may come up on a rare occasion. I think we all agree that the pandemic meets that definition. We also all hope that it is a rare occurrence!
Fund 10 revenues for 2020-21 were approved at $30,597,444, a 1.5% increase from the previous year, with over half of that being the $245,000 of federal aid for COVID relief. Revenues have remained relatively flat over the last 10 years as any allowed increases by the state have often been offset by a slight decline in enrollment over that time. Expenditures were approved at $31,999,414, a 7.8% increase. This includes the $1M related to pandemic expenditures for technology devices and software for facilitating remote instruction across all grade levels. It also includes costs for personal protective equipment (PPE), cleaning materials and equipment, additional nursing time, and other non-technology costs related to administering virtual instruction. Part of the increase is also due to the fact that the 2019-20 ending expenditures that the increase is based on were lower than expected due to the shutdown in the spring and related savings. Many of the needs we identified in the spring didn’t have the items and costs come in until after the July 1st start of a new fiscal year. The District levy was set at $12,374,783, a 2.24% increase. District property valuations increased 3.5% to $1,264,124,667 which resulted in the 1.21% reduction in the levy rate to $9.79/thousand.
We know there are uncertainties that lie ahead with the pandemic, but we hope the budget developed will be able to cover many of the unexpected costs that may arise. If we are forced into another prolonged virtual situation, there may be some areas where we might save costs. There is also the possibility of additional federal funding to help. All-in-all, we are comfortable with where the District budget is for this year. We have concerns and reservations of what the long-term effect of the pandemic might have on the state economy, the state’s other budget needs, and how that might impact school funding and our District budget for 2021-22 and 2022-23 when the next biennial state budget is approved next spring/summer.
