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SCHOOL FUNDING FORUM

SCHOOL FUNDING FORUM. Revenues. Expenditures. Farmington Public Schools. School Aid Structural Deficit Spending Pressures Outpace Revenue Growth. Retirement Contributions—Rapid Growth Employee Health Insurance—Rapid Growth General Pay Raises Other—Fuel, Utilities, Supplies

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SCHOOL FUNDING FORUM

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  1. SCHOOL FUNDING FORUM Revenues Expenditures Farmington Public Schools

  2. School Aid Structural DeficitSpending Pressures Outpace Revenue Growth • Retirement Contributions—Rapid Growth • Employee Health Insurance—Rapid Growth • General Pay Raises • Other—Fuel, Utilities, Supplies • Revenues Growing Slowly

  3. School Aid Revenues & Spending Pressures • Spending pressures grow 5% per year • Revenues grow 3% per year • Shortfall of 2% each and every year without spending and revenue policy changes

  4. School Aid Problem (SAF) • Economy • Shifts in Revenue Sources • Less Revenue from the GF • Budgeting for items not originally intended for the SAF

  5. GF Transfer to SAF

  6. Pre-Proposal A Local Property Taxes Stay Locally Sales & Use Tax - 4% (60% to Schools) Income Tax - 4.6 Cigarette Tax - 25 cents (.02 to schools) Other Tobacco - None Real Estate Transfer - None Property Tax 34 mills (average) Cap on Property Tax- None Post-Proposal A Local Property Taxes go to State Sales & Use Tax – 6% (60% of 4% and 100% from 2%) Income Tax – 4.4 (was 3.9, now 4.35) (14.4%) Cigarette Tax - 75 cents (63.4% of collection) Other Tobacco – 16% Real Estate Transfer -.075% Property Taxes (6/24) Cap on Property Taxes – Lesser of 5% or Inflation New Use Tax???? Repealed How Are Schools Funded?

  7. SOURCES OF 2007 SCHOOL AID REVENUE

  8. Pre-Proposal A – 1993-94 Homeowner Property Taxes – 32.77 Mills Hold Harmless Mills – 0 Debt Mills .74 Total Homeowner 33.51Mills Total Business 33.51Mills State Funding – 0% Local Funding – 96% Federal Funding 2% Other 2% Adds up to $8,407 per Student Current Under – Proposal A – 2007-08 Homeowner Prop. Tax – 6 Mills Hold Harmless 8.3784 Mills Debt Mills 1.8 Mills Total Homeowner 16.1784 Mills Reduction of 17.3316 Mills Total Business – 25.8 Mills Reduction of 7.71 Mills State Funding – 50% Local Funding – 37% Federal Funding 2.2% Other 10.8% Adds up to $10,500 per Student Farmington Schools Funding

  9. Current Funding Foundation Allowance $10,500 (22% Increase Since 1994 Average of 1.57% Increase Inflation Average 2.6%) If No Proposal A Foundation Allowance $14,611 or $56 million in Additional Revenue (if we had not passed Proposal A or made any other changes to funding) Without Proposal A

  10. Per Pupil Foundation Funding $5,721 $2,067 $2,712

  11. 20J • Part of Farmington’s foundation allowance • Separate Categorical established in the Engler administration when a flat $ amount was allocated for a particular year • Topic of discussion during budget • If taken away, harms hold harmless districts inversely • Any reduction proposal should be equitable to all districts

  12. REVENUE2007-08 General Fund Budget

  13. EXPENDITURES BY OBJECT2007-08 General Fund Budget

  14. EXPENDITURES BY FUNCTION2007-08 General Fund Budget

  15. BUDGET FACTORS • Foundation Allowance • Wages/Benefits • Retirement Rate • Students - Enrollment

  16. BASE FOUNDATION ?

  17. Retirement Rate History *Estimated

  18. Enrollment History

  19. Enrollment History

  20. FARMINGTON PUBLIC SCHOOLS BUDGETED FOR 2007/08 AND 4 YEAR FORECAST

  21. Projected Unreserved Fund Balance

  22. Reasons for a Fund Balance • To smooth State Aid “Take Backs” • Federal/State Legislative Action • Assists in offering a continuous program, avoids knee jerk reactions • Emergency Expenditures • Sound Fiscal Management • Cash flow • Interest Earnings

  23. Reasons for a Fund Balance • Uncertainty of Revenues and Revenue Stream • Unanticipated Expenditures • Auditor Recommendation • Budget Stabilization

  24. 2008/09 STATE BUDGET • Legislature is currently working on their side of the proposal • In the past not voted until well after our school year has started • Current vote is on a $71 per pupil increase (.7%) • Dividing higher foundation districts

  25. What Have We Done in the Past? • Reduced $33 million – tightened our belts • Includes 225 Positions • See Website for Detail Listing of the Past Years’ Reductions • Budget Work Groups Submitted Reports • Conscious Effort Toward Three Areas: Revenue Enhancements, Efficiencies and Cost Reductions • Staff/community suggestions on website

  26. What is the District doing now? • Tying goals of Budget Committee to Farmington Forward goals • Creation of a Proactive Financial Model • Learning Configurations and Facilities Committee • Addition of all day kindergarten to assist with student achievement

  27. What Can You Do? • Become informed on what the District has done to date and will continue to do • Contact the Governor/Legislature to share your concerns about funding

  28. Important Dates • Presentation of budget document 5/20/08 • Public hearing on budget and tax levy 6/3/08 • Adoption of 2008/09 Budget – 6/17/08

  29. Questions and Suggestions

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