By Rick Palsgrove
The most recent five year financial forecast shows that Groveport Madison Schools’ finances are in good shape.
“The district is using the 6.68 mill operating levy (approved by voters in May 2014) to enhance academic opportunities, improve facilities, and provide a competitive environment to attract and retain talented employees,” said Groveport Madison Treasurer John Walsh.
Walsh said the Groveport Madison Board of Education “has fulfilled commitments to the community through more academic options for students and establishing a budget reserve of $3 million.”
“The other commitment was no new levy campaigns before 2019 and I believe this forecast proves that commitment can be met also,” added Walsh. “Our cash balance is becoming stronger, but the duty to be good stewards of public dollars continues and this is our daily challenge.”
According to the five year financial forecast, the district’s cash balance is positive through the length of the forecast with $10.9 million at end of fiscal year 2017 and $4.8 million at end of fiscal year 2021.
Groveport Madison receives approximately 54 percent of its total funding from the state.
“This is consistent with prior years,” said Walsh.
Local property tax funding accounts for approximately 40 percent of the district’s funding.
“This amount is similar to the last few years and it will drop in fiscal year 2020 and fiscal year 2021 when the five year operating levy expires,” said Walsh.
About 5 percent of the district’s revenue comes from other local funding sources.
“This amount remains flat as an overall impact to the district,” said Walsh.
Purchased services, which include things such as transportation, community school deduction, legal fees, county auditor/treasurer fees, utilities, gas, electric, and property insurance, make up about 34 percent of the district’s expenses.
Salaries and benefits account for about 60 percent of the district’s expenditures
“I would say this is low compared to other districts because we contract our transportation and we have a $14 million open enrollment/community school deduction,” said Walsh.
The district is required to pay $14 million of its state and local funding to the “Community Schools, Open Enrollment, and the Educational Choice Voucher program.” This is up from last year when the district had to pay $12 million.
This figure is based on the number of students who live in the boundaries of the Groveport Madison district, but who attend school elsewhere. According to Walsh, currently there are about 1,200 of these students. As of September 2016 it was estimated that around 5,900 students attend Groveport Madison Schools.
Walsh said the amount of delinquent property taxes in the district, as of June 30, 2016, is $3.1 million or 9.5 percent.
According to the five year financial forecast, total real estate property values in the district fell from $843.8 million in 2010 to $757.5 million in 2014.
“This represents a drop of $86.3 million in the last six years,” said Walsh.
Property values are set annually by the county auditor based on new construction, demolitions, Board of Revision/Board of Tax Appeals activity and complete reappraisal or updated values.
“Due to (state legislation) provisions, tax rates will adjust up, so losses would be limited. However, the district’s ‘fixed sum’ levies can never exceed the total dollars for those levy amounts,” said Walsh. “Any further drop in assessed values will result in lower taxes as most of the district’s levies cannot adjust upward.”
The county auditor provided the district the values of all tax abatements that will be added to the valuation beginning in 2015 collected in 2016.
“The first year that the values are added from being abated, the values are treated as new construction, which will give the district an increase in tax revenue,” said Walsh.
A complete reappraisal update occurred in tax year 2014 for collection in fiscal year 2015.
“Real estate values fell 5.1 percent for residential and commercial property fell 0.7 percent and total value declined in all classes by 2.1 percent,” said Walsh. “This was a lower decline than anticipated. An appraisal update will occur in 2017 for collection in fiscal year 2018 and we are projecting a drop of 1 percent in residential and for commercial property to stay steady.”
The district has seen growth in new construction from the values provided in January 2015 to January 2016 in both residential/agriculture properties and commercial/industrial property.
One lost source of funding is the tangible personal property tax because in 2011 it was reduced to zero as a result of state legislation effective in 2005.
However, Walsh said, “Public utility personal property values have seen a growth over the past five years and we expect a slight increase each year of the forecast.”