Proposed budget a tough deal for schools
To the Editor:
The governor released his proposed budget last week. It was a tough deal for schools, but it could have been worse. Here is my understanding of state equalization funding for this year and next. No allowable growth has been set for the year after for FY12 until the legislature sees if the economy has picked up with improved sales and income taxes.
You might think of recent action by the governor in this scenario. The governor/legislators gave the district a dollar to work with, then took back a dime in the middle of this year. Next year the state will give just 2 cents of the 10 cents back and call it a good deal for funding 2% allowable growth. But, the governor has said that we should not raise more money locally, nor fire anyone earning that 10 cents in the first place. That is political talk so that it does not sound so bad. Here is the reality for Clarke.
Clarke may have to reduce the number of employees to decrease expenditures. The district may have to raise money through local property taxes to increase revenues lost.
The governor took $650,000 this year from our funds. He is giving back $200,000 for next year, leaving us with the first deficit of $650,000 and adding another deficit of $450,000 for FY 11. So, in two school years, the state has cut $1.1 million from equalization to Clarke. The district must increase revenues and decrease expenditures.
Remember that 75-80% of our expenditures are in salaries and benefits. Our unencumbered, unreserved cash reserve was about $250,000 at the end of FY09, so the district cannot just dip into cash reserves for this year or next. Next year will also NOT have stimulus money from federal sources to help.
The district is preparing to use board action to set up an instructional support levy (ISL) for the next five fiscal years to put more cash and authority to spend the cash into our general fund budget. To do so, the district will remove the 5% income surtax from the Voted Physical Plant and Equipment Levy (VPPEL) and apply it to the ISL. Then, the district will take some of the property tax and authority from VPPEL and move it to ISL and the general fund. This would be for a maximum of 5 years and could be less if the state equalization returns to a significantly better level.
Neither VPPEL nor SILO may be used for paying salaries or benefits. Some of the new VPPEL expenditures will taken from SILO funds from the one cent statewide penny. SILO funds will also continue to pay for debt service instead of the local property taxes used for debt service in past years. SILO will continue to do things such as pay for roofs, buses, technology, etc.
This is a tough and historically bad time for revenue in Iowa. We will have to work together to make it through without interrupting educational programs for our students. Send your questions to me and I will try to answer them for you.
Ned Cox, Superintendent of Clarke schools
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