District 833 budget balanced with help of reserves
South Washington County Schools will dip into its budget reserves this year to erase a $1 million general fund shortfall.
The general fund budget for the 2014-15 school year includes $193,374,796 in revenue and $194,443,488 in expenses. That roughly $1.07 million gap will be covered with reserve funds, a relatively common practice in recent years as administrators say education costs are exceeding state funding.
There have been state aid increases but they have not kept pace with inflation over the past 10 years, District 833 Superintendent Keith Jacobus said.
“We’ve had to depend more on our fund balance just to hang in there, so to speak,” Jacobus told the School Board last month.
The district uses reserve funds to erase deficits and avoid spending cuts that could affect classroom instruction or other education services.
The fund balance was $19.7 million in June 2012. This year it’s down to $9.9 million, or 6 percent of annual operating expenses. A district policy calls for maintaining a fund balance of 5 to 9 percent of expenses.
District projections show the fund balance falling to 5 percent by next year. It is projected to drop to 0.6 percent by 2016.
State aid comprises 80 percent of the district general fund. State funding increased from $142.6 million last year to $153.8 million this year. That included more general education revenue to pay for expanded all-day kindergarten. Also, there were per-pupil basic state aid increases, as well as additional state funds tied to the voter-approved property tax levy increases last fall.
The School Board approved the budget June 19. It covers the academic year of July 1, 2014, to June 30, 2015.
Looking ahead, the district is assuming 1.5 percent annual state aid increases in each of the next two years.
“That has the potential to impact the budget projection model moving forward,” cautioned Aaron Bushberger, the former District 833 finance director who presented the budget to the School Board June 19. The projection easily could change based on education spending decisions by the governor and Legislature.
Other budget notes:
- Salaries and benefits make up about 82 percent of District 833’s general fund.
- Property taxes account for 14 percent of general fund revenue, or about $28.1 million in 2014-15.
- Average staffing ratios for the coming year are 28.5 to 1 in grades K-6; 30.5 to 1 in middle school; and 31.5 to 1 in grades 9-12.
- Student enrollment for 2014-15 is projected to be 17,844.