Revenue projections launch budget discussion
Feb. 17, 2010
Springfield Public Schools board of education received an update regarding district revenue projections for the current and upcoming fiscal years at the Feb. 16 regular session. This report marks the beginning of the budget discussion for the 2010-2011 school year, a year in which the district anticipates further budget reductions to fund critical needs.
SPS has three main revenue sources: local property taxes, sales taxes and the state foundation formula. Based on current receipts and trend projections local property taxesfor 2009-2010 will be above budget, while sales tax receipts and state funding via the formula will be below budgeted amounts. SPS is awaiting payments from several sources that could impact current year revenues, and thestatebudgetdirector has indicated a possible reduction.
SPS prepared for a difficult budget year in 2009-2010, cutting expenditures by $6.1 million. These cuts included personnel reductions, facility maintenance and improvements, professional development and curriculum. SPS projects to be right at the district’s budget for the current year because of these preemptive cuts and conservative revenue projections used in the budgeting process.
2010-2011 revenue projections
Increases in local tax revenues, decreases in sales tax revenues and reductions to the state foundation formula are expected for the 2010-2011 budget year. Further state-level reductions to categorical expenditures (those outside the foundation formula) are likely to have a significant impact on items such as transportation and Parents As Teachers. The district’s projected operating revenue of $192,500,000 for 2010-2011 represents an increase of just $200,000 over current revenue.
Given the current financial outlook for 2010-2011 it is anticipated that any increases to the budget will need to be funded by budget reductions in other areas. Among the known increases to expenditures are retirement benefits (the state retirement system is raising the required contribution amounts), legal fees and utility costs. If the district provides a salary step increase to employees, it will cost an additional $2 million. View the complete revenue projections presentation made bySteve Chodes, the district's chief financial officer.
The situation could be more difficult in 2011-2012, when the stabilization dollars Missouri received from the federal stimulus program are scheduled to expire.
2010-2011 budget development process
Though there is still much to be decided at the state and local levels that will impact district revenues, the 2010-2011 budget development process now begins in earnest. One of the first steps was to collect staff input to identify possible additions and reductions to the budget. At the Feb. 16 regular meeting the board identified several key assumptionsto help develop a preliminary 2010-2011 budget. Those assumptions include:
- Maintain the fund balance at the current level.
- Keep total salary and benefits costs at current levels but develop two scenarios for consideration:
- Identify potential cuts from existing salary and benefits costs amounting to about $2 million in order to fund astep increase or salary adjustment.
- Maintain current staffing levels with no step increase or salary adjustment.
The board will have further discussion on these assumptions at the March school board meeting. These details provide parameters to guide administration in the creation of a preliminary budget proposal. This preliminary budget will be provided to the board at its regular meeting on March 16, 2010. The board will discuss scheduling a special budget work session at their March meeting.
Before the board finalizes the 2010-2011 budget, the district will solicit public input in order to further refine the final budget.
Other items from the board’s Feb. 16 regular meeting:
· The board approved utility easements at Bowerman, Hickory Hills and Shady Dell schools.
· Kickapoo High School swim coach Jason Hite was also recognized for being named the “Coach of the Year” for the Midwest Region by the National Federation of State High School Associations. Hite is a teacher at Phelps Center for Gifted Education.
You can read the complete meeting agenda here.