School board makes rare money issue request
LISBON — The village school board is doing something it has not done in 35 years: Asking voters to approve a new money issue specifically for operating expenses.
The 1 percent income tax placed on the Nov. 8 ballot would run for 10 years and generate an estimated $759,000 per year, which officials say is needed to address a looming budget deficit come 2019.
District voters last approved an operating levy in 1981, and since then the only other money issue that passed was a bond issue in 1991 to convert the middle school into a middle/high school. The only other attempt to raise taxes since then occurred about 10 years ago, when voters rejected a levy for renovation of the football field.
The 1991 bond issue was for 25 years and expires at the end of 2016, which means property owners can expect to see a decrease in their property taxes starting in 2017. The owner of a $100,000 will see their taxes decrease by $94.
The school district has benefited from a $3 million-plus carryover balance it has been able to maintain over the past five years. The balance has been declining, however, as district spending has begun to outpace revenue, despite the best efforts of the board to eliminate positions through attrition and look for ways to save money.
Deficit spending is expected to continue until the balance is gone sometime in 2019, school officials predict. The school board wants to prepare now before it gets to that point so the district can continue to maintain a healthy balance and avoid having to make any cuts that might affect the quality of education provided to students.
The biggest problem is revenue has remained mostly flat over the past eight to 10 years. During that period total revenue peaked at $8.59 million in 2010 before dropping to $8 million in 2013 as federal stimulus funding expired. Revenue increased only slightly over the next several years before rebounding to $8.54 million in 2016, about 1 percent below 2010 levels.
During this period, the district’s two largest sources of income–real estate taxes and state funding –have remained largely flat and actually decreased in regard to state funding. Real estate taxes have increased from $1.34 million in 2009 to $1.4 million this past year — a 3 percent change. State funding totaled $5.24 million in 2009, dropping to $4.9 million in 2014 due to cuts enacted by the state legislature. State funding rebounded to $5.2 million this past school year, still slightly below 2009 levels.
Meanwhile, spending has increased by a modest 4.6 percent over the past four years, going from $8.38 million in 2013 to $8.78 million this past year. State funding and property tax revenue are both expected to decline this year, however, according to the most recent financial forecast prepared by school treasurer Vicky Browning-Prowitt.
Health insurance costs continue to escalate, with premiums increasing by nearly 27 percent over the past two years, and claims exceeding premium contributions by $468,810. Special education costs have more than doubled in four years, from $439,888 in 2012 to $897,592 this past school year.
A fact sheet provided by the school board shows the number of students has declined over the past 20 years, from 1,330 in 1996 to 860 this past school year, a 35.4 percent drop, which impacts school funding since the state subsidy is based on enrollment. The number of teachers has also declined over the same period, from 75 to 61, an 18.7 percent difference.
Teachers agreed to a new two-year contract in June that grants them a base salary increase of 1 percent the first year and nothing in year two. The teachers also agreed to pay higher deductibles, which will result in a net savings to the district of $74,000.
Officials point out the tax would be on “earned income,” which applies only to those receiving a pay check. Retirement benefits such as Social Security are exempt, but if the retiree works a part-time job that portion of his income would be subject to the tax.