With a levy looming in the near future for Columbus City Schools, budget talks for the 2008-09 fiscal year are guaranteed to be more intense than in years past.
The Columbus City Schools Board of Education heard its first presentation of next year’s budget at the May 20 regular meeting from the district’s executive director of budget and financial management, Robyn Essman.
According to Essman, the CCS budget committee "did not play a part in the fiscal year 2009 budget, but was a critical part of the 2007-08 budget. This is a reflection of their recommendations and goals from that budget."
The 2009 budget shows overall higher costs within the district, with no real increase in revenue.
The general fund for fiscal year 2008-09 is proposed at $688 million. This is an increase of $34.7 million over the fiscal year 2007-08 budget.
The highest expenditures within CCS falls within the personal services category, which includes salaries and wages paid to district employees. The district anticipates $384.5 million dollars in personal services for 2008-09. This accounts for 55.9 percent of next year’s budget. The increase in this area can mainly be attributed to the 2.5 percent cost of living increases that were included in recent salary negotiations.
As a result of salary increases, the district is also seeing a 4.23 percent rise in fringe benefits, which include the district’s share of various medical and life insurances, which are calculated as a percentage of wages.
Another significant increase in expenditures within the district falls under materials and supplies, with the largest increase reflecting the recent hikes in fuel costs, which the district anticipates to jump 40 percent during the 2008-09 fiscal year, bringing the fuel up to an estimated $5.6 million dollars.
"As we know right now, fuel is a critical piece of everyone’s budget," said Essman, "It’s really hard to get a handle on. It’s hard to make a projection."
Essman added that the district is continuously monitoring the oil markets and buying fuel at the lowest possible prices through the State Term Purchase contract.
The non-general fund budget for fiscal year 2008-09 totals $636 million. This includes debt service, capital project funds, and other operation costs not accounted for in the general fund.
This brings the district’s total budget for fiscal year 2008-09 to approximately $1.3 billion.
With all that money coming out of the district, all eyes are now focused on the dollars going in to CCS.
The district’s revenue consists of six categories: real estate tax, personal tangible taxes, unrestricted grants, restricted grants, property tax allocation and other revenue.
Real estate taxes account for nearly 48 percent of the school district’s income. Columbus City Schools anticipates the collection of $319 million through this method, a one percent increase over the current fiscal year.
The district is seeing a significant decrease in personal tangible taxes. The district plans to collect roughly $18 million in personal tangible tax during the 2008-09 fiscal year, a 77.8 percent decrease from the previous year. This decrease stems from the fact that Ohio is currently phasing out the personal tangible tax.
This budget, as presented, was not voted on at the meeting. The board has one month to study the proposed budget before voting takes place, which is expected to occur at the June 17 meeting.
Five year forecast
Also at the meeting, the board heard updates to the five year forecast, which, according to district treasurer Michael Kinneer, goes hand in hand with the budget.
In Kinneer’s presentation, he predicted to the board an end of the year balance of $39.5 million at the end of the 2007-08 fiscal year. He also reported that with no additional funds coming into the district, the cash balance at the end of the 2008-09 fiscal year will be an estimated $13.1 million. By the end of fiscal year 2013, the district would be in the red with a $369 million dollar deficit.
The board has expressed its intent to place a levy on the ballot in November, although this matter has yet to voted on. They have also yet to identify the amount of this impending levy.
According to Kinneer, if all of the assumptions identified in the 2009 budget were to reman constant over the next five years, levy would need to be at least 8.3 mills.
An 8.3 mill levy would generate an estimated $82 million in additional funds per year and would the owner of a $100,000 home an additional $254 annually.
To come up with this figure, Kinneer factored in conditions the board has already expressed a desire for, including the fact that the levy would last for a period of four years, and that during those four years the district would not return to voters for additional funds.
According to Board President Terry Boyd, this factor serves only to give a general idea of what the levy may look like, since the committee set up to discuss the upcoming levy has yet to identify a millage requirement.
Boyd emphasized that Kinneer’s estimate stems from the assumption that no factors within the district change over the next five years – a situation that is highly unlikely since the additional and deletion of programs from the district is a common occurrence.
"Whenever you add programs, it costs more money, but then you take away programs, too, so the number will change again," said Boyd. "We don’t know at this time. It could be less or more."
Boyd also noted that, according to the budget, the levy will have little to no impact on fiscal year 2009.
"If we did absolutely nothing, we could squeeze through fiscal year 2009, but then we’d be up the creek without any paddles, and we’d have to do something quickly. That is not a position we would like to be in," he said.