Our Financial Future

Good Morning All,
It occurs to me that we have not talked lately about the legislature and our budget. I wish there was concrete information available. I will attempt to describe what we know and then provide an educated guess about next year's funding. As you read this information, please the District understands its responsibility is to students, staff, and taxpayers. Be confident we are doing what we can to keep programs running, everyone employed, and taxes reasonable. If you have questions, please phone or drop by.
First, for 2009 - 2010: By the end of the year we will be down approximately $516,900.
A. While the legislature approved a 4% increase in allowable growth for this year, it did not deliver. That state aid was reduced by 1.5% resulting in an estimated state aid shortfall (at the beginning of the year) of $54.86 per weighted student. For our district, that amounted to about $61,000.
B. The 10% state aid reduction for FY10 amounts to $410 times our weighted enrollment, about $455,900. (The 10% reduction resulted from a meeting of the Revenue Estimating Conference. This group reviews net tax revenues, estimates the next quarter receipts, and reports the information to the Governor and Legislature. Because of the recession, net receipts were down significantly. The State of Iowa "must" balance its budget, therefore the cut in state aid.)
Second, for 2010 - 2011: There are two common scenarios and both will depend on state revenues and the politics of state government.
It is estimated that our state aid will be reduced an amount between $341,000 and $781,700. The reasoning follows. Our source is local data, Iowa Department of Management, Iowa School Information Service (ISIS), and Bill Garner Consulting.
A. According to ISIS: The first estimate or scenario of the state short funding is $310 per weighted enrolled student. It results from the projected shortfall in the governor's recommended budget. The number is determined by dividing the $170 million that is under funded by the state's total weighted enrollment to come up with a per pupil number. That would impact us by an additional $341,300.
B. That same source states: A $710 is our concept of a worst case scenario - it's the carry forward of the FY 2010 across the board cut....
Added to this is the anticipated $310 shortfall expected next year. That would impact us by an additional $781,700.
While projections for the future appear bleak. However, we are in a better financial shape than the vast majority of schools, and we do have a plan.
This plan has four parts. First, we will realize savings due to retirement and resignation of staff. Second, taxes will increase. Our goal is to keep all increases to a minimum. Third, we are economizing. We will only be ordering necessities. Fourth, we will spend down our cash reserves. The result of our plan will be known at the end of the year. Even after these efforts, the losses will take several years to get back to normal.