The Glenwood Board of Education formally approved the school district’s 2014 budget at its monthly board meeting last Monday in the Glenwood Community High School Media Center.
The district’s $42.7 million budget shows a 23-percent spike over the current budget year. This total, however, includes more than $13 million in the district’s unspent balance column, meaning the district’s total operating budget, represented by the total expenditures and other uses line item, is actually up just slightly from the re-estimated $27.6 million last year to $29.1 million for 2014.
Most of that increase in the 2014 budget will be covered by the district’s unspent balance, said Glenwood Superintendent Devin Embray.
“The unspent balance is that, it’s what was unspent and it also includes our cash on hand in the district,” Embray said, adding those funds were listed in last year’s budget but the accounting of how districts count those funds has changed this year.
“Because we have a higher unspent balance we are not going to be making budgetary cuts to flow our programs,” Embray said.
The state of Iowa’s school budgeting process, which requires all budgets to be certified by the state by April 15, represents an estimation of the revenues the district anticipates collecting while also giving the district authority to levy taxes accordingly. The district’s budget includes all district funds, projected expenditures and projected revenues, including state, federal aid and local tax dollars. State aid represents 55 percent of the district’s regular education costs with the remainder of revenue coming from local funds (36 percent) and federal funds (9 percent).
Embray put the school budgeting in more layman’s terms: the district can’t spend what it doesn’t budget for. The budget is an estimate of the district’s spending for the next year.
“It’s not how people budget at home and that’s what’s different about how schools operate,” Embray said. “Most people have a better understanding of how cities and counties budget than they do schools. That’s because of the non-co-mingling of funds. It’s sort of a ‘water, water everywhere but not a drop to drink,’ because funds can only be used for certain purposes.”
The tax rate for the district is going down for the third straight year. The 2014 levy will be $15.41 per $1,000 of taxable valuation on property in the district, down almost nine percent from a year ago. The district’s tax asking is also down slightly from $7.7 million last year to $7.5 million this next year.
“We’ve been very diligent in collecting unspent balance and trying to back our district with cash,” Embray said. “But there will come a time, if the legislature doesn’t do something positive, where we won’t be able to continue that mindset we have right now concerning cuts.
“We might have to look at budget reductions if our enrollment doesn’t go up or if the allowable growth stays at zero percent. We could be looking at reductions at the end of the 2013-14 school year or 2014-2015 schools years.”
The legislature is currently in committee mulling allowable growth for per student funding in 2014. The per student state funding number last year was $6,001. This number represented a two-percent increase, creating an additional $113 per student in state funding last year. Embray is “cautiously optimistic” the state will match that allowable growth this year.
“If it does change and we do get allowable growth, our tax rate will drop even more,” Embray said.
Embray estimated that drop in the levy could be as much as 30 cents.
The district’s largest expenditure for 2014 remains its instruction line item at $15.6 million. Salary and benefits continue to make up the bulk of those costs. Purchased services (9 percent), supplies (6 percent), Area Education Association services (4 percent), “other” (1 percent) and equipment (less than 1 percent) make up the rest of the instructional budget.
Support services, which covers the district’s administrators, guidance counselors and nurses salaries and benefits, library, building and transportation services comes in estimated at $7.5 million. Non-instructional program costs, which covers the Kid’s Place Day Care and the hot lunch program totals $1.9 million.
The district’s remaining expenditures covering debt service, facilities work and AEA fees totals $3.6 million.
As good as Glenwood’s finances look now, problems do loom on the horizon, Embray said.
The Affordable Care Act, which goes into effect Jan. 1, Embray said, adds potential for substantial increases in costs for the district due to the additional health care and administrative fees charged to insurance companies being passed down to policyholders.
“Those fees will add up,” he said. “It could be pretty ugly for our district. It could be as much as $500,000 to $800,000 more and the penalties for not doing it could be $500,000.”
Embray said the district likely won’t know the impact of the Affordable Care Act on the district’s budget re-estimation until early 2014.