Highlands School District’s preliminary budget for next school year has a $3.7 million hole in it.
That’s the preliminary budget gap between the district’s proposed spending of about $46 million and its estimated revenue of about $42.3 million.
The district released its preliminary budget Tuesday. The school board is expected to vote on it Feb. 18.
Highlands is adopting a preliminary budget instead of declaring it will not raise taxes by more than its state-imposed limit of 3.3 percent. The district has said it will ask the state Department of Education for permission to exceed the state-imposed limit, citing increased special education and pension costs; the exceptions would allow the district to avoid a voter referendum and increase taxes by more than the limit if needed.
The preliminary budget as prepared does not show a tax increase. The shortfall is shown as covered by the district’s reserves, which would fall from about $14.4 million to about $10.7 million in total.
District Business Manager Lori Byron refused to answer questions about the budget. School board President Debbie Beale could not be reached Wednesday.
The district’s current tax rate is 24.63 mills. Under the Act 1 limit of 3.3 percent, that could be increased up to 25.4427 mills. If the property tax was increased that much, the owner of a home assessed at $100,000 would pay $81 more, with the tax bill increasing from $2,463 to $2,544.
But it would do little to cut into the shortfall. Based on the district’s total assessed value of about $786.7 million, the maximum increase under Act 1 would generate about $639,000 in additional funding.
That would leave a deficit of just over $3 million.
The district does not collect the full value of its taxes, due to homestead exclusion tax breaks and those who don’t pay.
Of the $14.4 million in reserves, about $3.59 million is marked as unassigned, with the rest either marked as committed or assigned.
The preliminary budget for the 2019-2020 school year is about $5.7 million higher than the $40.31 million for this school year, an increase of just over 14 percent. The current budget had been reduced from a preliminary total of about $47.91 million.
About a year ago, the district was facing a $6 million deficit. Officials said it was due to retirement costs and increasing costs for cyber and charter schools.
To deal with that, the school board approved reconfiguring the district’s buildings, furloughing staff and a maximum 3.5 percent tax increase to balance the budget. The district also borrowed $10.45 million, used in part for pension and bond payments.
The building reconfiguration is saving the district about $1.15 million, according to the district.
Last May, the district furloughed 26 employees, consisting of seven teachers and 14 aides. Since then, all but one of the teachers and all of the aides have been recalled, district spokeswoman Jennifer Goldberg said.
Salary and benefits increases and those for recalled staff are adding $1 million back onto the district’s spending.
In this school year’s budget, $4.3 million in retirement costs had been eliminated. That cost is back in for next school year and up to about $4.5 million because of salary increases, employment contracts, and the district’s pension contribution rate increasing from 33.43 percent to 34.29 percent.
The district also is showing a 3 percent increase for tuition, transportation and other miscellaneous expenses totaling about $248,000.
Brian Rittmeyer is a Tribune-Review staff writer. You can contact Brian at 724-226-4701, brittmeyer@tribweb.com or via Twitter @BCRittmeyer.
