On Tuesday, June, 19, the board will have a public hearing on our proposed budget for this coming fiscal year. Please attend at 6pm and comment at the district office in American Fork.
Budget 2012-13: Increase Tax Rates? Don't Increase Tax Rates.
First, I would highly recommend reading the first few pages of the budget, found here. Using the pdf pages, go to pg. 9 - 10 to read the summary on the tax rates, and then 11 - 14 to see the "Big Picture" of the overall budget. It should take you less than 10 minutes. If you are interested in the employee changes, see pg. 82. Pg. 83-88 contain a glossary. You can also see the Board, Superintendent and total principal salaries and benefits outlined on pg. 26. We are planning on an additional 2,076 students this fall, and adding 66 full-time employee positions and 3.5 counselors to accommodate that growth. (Incidentally, the state has mandated a certain counselor to student ratio. Alpine is behind on this ratio, and we send a letter every year telling the state we are working on complying with their mandate. I, personally, would err on the side of having more teachers, but that decision isn't in my hands.)
At the board meeting, last month, we reviewed the proposed budget which included an increase in property tax rates. This would require a Truth in Taxation hearing in August. The rationale behind the increase was to "recoup" the property tax amount that goes to charter schools in our area. About 4 or 5 years ago, the legislature changed charter school funding from entirely income-tax based to getting a portion from local property taxes. The actual funding formula (other than overall increase in per pupil funding for ALL public school students), as far as I can tell, hasn't changed; just the combination of pots has changed. At the time of this change, many school districts increased their property tax amount to accommodate the loss of property tax revenue. Alpine did not. We were planning on a bond, and we try to be more conservative in our approach to taxation. At the time, the amount deferred from property taxes was $500,000. It is now up to $1.2 million. (It is based on the number of students going to charter schools, and the payout is 25% of the per student--including charter students--property tax amount. Email me if you want more details.) Our administration and most of the board found the argument compelling that the money should have been ours and wasn't anymore. In my opinion, the money is the taxpayers' and whether or not we pull from one pot or another doesn't necessarily entitle us to that money. I do agree with the idea that the amount of property taxes sent to charter schools should be clearly identified on the property tax notice (which was a bill that never came before the State Senate this year but passed in the House). I also find property tax the least fair and the most egregious method of taxation. For that reason, I would be opposed to a property tax increase except as a last resort. I wouldn't base it on an appeal to fairness.
That being said, in the last month, our budget staff, Jim Hansen and Teresa Newman, and our Business Administrator, Rob Smith, have received more concrete information from the county. It appears that due to 1)increased property values, 2) more people paying their taxes, and 3) the legislature consolidating property tax revenues and shifting from one pot of property tax to another pot, the district will be receiving $1.5M additional revenue from the state over our originally proposed budget. Due to this increase, they are recommending that we not increase the current property tax rates. (The board could, at any time, still decide to increase rates, but, most likely, won't without the recommendation of our administration.) However, despite a lack of tax rate increases, we have budgeted for 30 full-time teaching positions. There may be some flexibility in this: more teachers that are part-time or whatever is seen as necessary. The Obama EduJobs program from two years ago, allowed us to hire 26 teaching positions. That money is no longer available, and so those 26 positions were to be eliminated. Due to some good budget work and the reasons I mentioned above, we will be able to retain all 26 positions and add 4 more, in addition to the teachers required by additional student growth. This is phenomenal! In January, the board expressed a desire to reduce class sizes. We have had several parents (and less publicly, teachers and administrators) comment on the need to reduce class sizes. The original, original budget included only 8 additional teaching positions. But, since this has been a high priority for the board, I have been impressed with the ability to come up with 30 positions. With 79 schools in the district, it is a drop in the bucket, but, like anything, it is a big step in the right direction. I would recommend an email or a comment at the budget hearing, if you are pleased with the reduction in class sizes and/or the static property tax rate. I can't thank our business office enough for all their hard work on the budget and for looking for ways to not increase property tax rates, but to decrease class sizes. Our business department has very good people, and I appreciate their efforts on our behalf.
Some additional items on the budget that might be of interest.
1. Health care costs went up nearly 16%, which would have added $8.6M to our budget. The collective bargaining agreements (also on this meeting's agenda: See Action Items: Certified, Classified, and Administrative Agreements) include five different health plans, ranging from current-level coverage (that would have increased the district's costs $8.6M) to a Health Savings Account. Employees requesting the current level of coverage will need to pay a portion of the premium. Those opting for the Health Savings Account will receive the difference between their reduced premium amount and the amount the district is paying for everyone else into their Health Savings Account. The other three plans fit in between those two extremes. As is, our health care costs didn't increase very much. I applaud our administration and our associations for their creative approach in solving this dilemma.
2. Federal Revenues make up 8.2% of our total budget. For our general fund (day-to-day maintenance and operations), it is only 7%, or $28M out of $377M. Due to the failure of the Congressional Super Committee, overall Federal Revenues will be cut 9% in January. So, Federal Revenue is a figure we need to keep an eye on. For Nutrition Services, Federal Revenues make up nearly 48% of of the budget, or $10.9M out of $22M. A lot of this money is for Free and Reduced lunches, but all student lunch are subsidized, either by the state or the Feds, or both. I was unaware of this information until a year ago.
3. Pg. 18 shows a pie chart of the expenditures in the General Fund. You can see that 70% of our expenses are on Instruction.
4. Our collective bargaining agreements include funding "step and lane" which is the salary schedule. As employees get more education and are with the district longer, their salaries are increased. This requires an increase in the budget to accommodate those increases. Also, there will be a 2%, one-time bonus given to all employees out of last year's budget, which came in under projected expenses.
5. The Common Core math textbook purchase is being taken out of Fund Balance (essentially our savings) from this past fiscal year (2011-12). It will be about $1.2 - $1.5 M.
6. The Collective Bargaining Agreements change our requirement to negotiate with the associations from them needing to have a majority of employees (State Law) to having the "greatest number".
7. And lastly, the budget includes $1.5 M for the purchase and implementation of a new financial/purchasing system. Our current system is 30-years old and has been modified in-house multiple times. Those who are familiar and comfortable with the system are few and far between. The financial system will be discussed and voted on in the July board meeting.
The Agenda includes the reappointment of our superintendent, Dr. Vernon Henshaw, for another two years. There is no formal contract, but the benefits include the same health and retirement benefits as our other employees. The budget includes a raise for both Dr. Henshaw and our Business Administrator, Rob Smith. Dr. Henshaw is a very good and competent administrator. I have seen him ably implement whatever direction he is given from the board.
Common Core/State Board of Ed Update
The State Board of Education will be voting in August on whether or not to remain a governing member, to change to advisory member or to withdraw completely from the Smarter Balanced Assessment Consortia (SBAC), which is creating the state tests all Utah public school students (district and charter) will take come 2014-15, along with 30 other states. (What is tested is what will be taught.) Our original agreement with SBAC, as included in our federal Race to the Top application, Phase 1, was just a non-binding memorandum. In the Race to the Top, Phase 2 application, this non-binding memorandum was replaced with a signed, legally-binding contract. (See page 286 for the signed contract with SBAC.) Additionally, the SBAC consortium signed a legally-binding cooperative agreement with the Federal Department of Education. So, via our contract with SBAC and their agreement with the Feds, our state tests are subject to Federal control and supervision. Interestingly, the state board never discussed or voted on this contract with SBAC. State Board President, Debra Roberts stated in a public forum on April 26 that the contract was not legally binding because the board never voted on it. However, it was signed by the Board President, the Governor, and the State Superintendent.
It was suggested during the June meeting that a letter be sent changing Utah's status from Governing Member to Advisory Member. The Board was told that Advisory status would alleviate our obligations to the consortium. State Board Member Dave Crandall read the contract and indicated that our obligations would be the same with the exception of losing our vote in the consortium. Based on Member Crandall's information, Board President Roberts declined to sign the letter, since there was no apparent advantage. Kudos to Mr. Crandall for his follow-up! Because of this, the full board will be voting on whether to withdraw completely from SBAC this August. Without the direct obligation from the consortium to the Dept of Ed, Utah can adopt the Common Core standards and still determine it's own tests. Currently, there are no financial penalties for this course of action. There is, however, concern that we may not receive our (illegal) No Child Left Behind waiver if we pull out of the testing consortium. Once we are granted the No Child Left Behind waiver, we are obligated, as far as I can tell, to maintain the Common Core standards and SBAC testing until such time as the Federal government determines we need to do something ELSE in education.
Additionally, the State Board is reviewing Social Studies standards. If you are like me, you will want to pay close attention to this process and give a lot of input.