Horicon Board of Education Approves Preliminary Budget
The Horicon Board of Education approved the preliminary budget for the 2013-14 fiscal year at their regular meeting on Monday, August 19, 2013. The General Fund (Fund 10) budget calls for Revenues of $8,656,039.76 and expenses of $8,849,552.34 giving us a $193,512.58 deficit.
On July 1, 2013 the Wisconsin Department of Public Instruction released their preliminary state aid projections for all school districts. These preliminary estimates show that the School District of Horicon can expect $4,567,909 in state aid, a decrease of $394,289 or -7.95% from 2012-13. This unexpected decrease in state aid was extremely disappointing news. During the state budgeting process it was announced that there would be an average increase of one percent (1%) in state aid across the state. Even with that overall increase, more than one-half of all districts in the state received a decrease, some as much as -15%.
The decrease in state aid means that property taxes will need to increase to make up the difference. The preliminary budget that was approved by the Board of Education calls for revenues from local property taxes of $4,434,808. This is $100,000 less than the amount the board could have approved as allowed by the state (Department of Public Instruction). Final property valuations from the state will not be available until October but based on current estimates this levy will result in an estimated levy rate increase of 14.8% (an approximate increase of $150 for a home with equalized valuation of $100,000).
The cut in state aid comes at the same time that state income taxes were cut by $650M with the average filer seeing a tax reduction of about $152. It is our hope that for many taxpayers, the increase in property taxes will be offset by the decrease in income tax but it is fully realized that each individual situation will be unique.
There are several key factors that have contributed to the reduction in state aid:
The amount allocated by the legislature for public education.
State aid is a cost reimbursement formula. This year’s state aid is based on last year’s actual costs. If a district reduces its costs, it reduces what it is eligible to be reimbursed for.
State aid is based on each district’s data compared to the state averages of all other districts’ data. Changes made by other districts have a direct impact on the state aid received by Horicon.
State aid is also based on the district’s ability to pay through property taxes. This is based on the amount of property value per student in the district. As student enrollments decrease, the property value per student increases. In Horicon’s situation, expenses have decreased, student enrollments have decreased, and property values per student have increased.
The decision to levy less than the maximum allowable amount was made possible by the recent increase in the fund balance. The district has maintained a strong commitment to reducing expenditures where ever possible and thus has finished each of the past four years with a surplus. This surplus has helped to offset the projected deficit of nearly $200,000 for 2013-14. Long range forecasts show a projected deficit of $375,000 for the 2014-15 fiscal year. We are currently working on plans to increase revenues, reduce costs, and perhaps reduce the fund balance further as we begin to discuss the budget for 2014-15.