West Jeff Schools’ financial forecast better than expected

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(Posted Nov. 11, 2020)

By Linda Dillman, Staff Writer

A little light broke through the cloud of deficit spending for Jefferson Local Schools during a Nov. 9 discussion on the district’s five-year financial forecast.

While Treasurer Mark Ingles admits deficit spending has been an ongoing problem for at least the past four years, he said the forecast is better than expected due to revenue assumptions made in the May 2020 forecast not coming to pass.

“For instance, in May there was a lot of uncertainty regarding the impact COVID-19 was going to have on the economy and, accordingly our revenue sources,” Ingles said. “At the time, the state cut state funding for schools by over $300 million, with Jefferson Local School District experiencing a reduction of over $200,000.

“It was assumed at the time, and reasonably so, that another reduction to state funding was coming in Fiscal Year 2021. This has not happened yet to date. In fact, the state economy is looking much better than it did in the spring. There is a possibility that another cut could happen this fiscal year, but at this time I do not find it reasonable to assume so.”

According to Ingles, it was originally assumed that the district’s income tax revenue would take a hit due to the COVID-19 recession. However, the local economy weathered the current downturn better than expected. While the treasurer is still forecasting a 4 percent decrease in collections this fiscal year, it is half of the original projection of an 8 percent decrease.

Madison County is undergoing a full property value re-appraisal in 2020, which will impact Jefferson Local property tax collections starting in 2021.

“We do not have the values yet, but initial indications are that values increased by a healthy amount,” Ingles said. “Since Jefferson Local School District is on the 20-mill floor—which is the lowest legal operating millage rate—we will see an increase in revenues.

“The income tax sharing agreement with the village is coming in stronger than expected due to the additions of Amazon and Medline to the tax rolls. Through the first three quarters of the year, we have already exceeded the estimates for the year in the May 2020 forecast.”

Ingles said he was able to reduce forecasted expenditures in supplies and materials after discussions with administrators. Two positions at the end of the 2020-2021 school year will be vacant due to retirement and will not be filled, resulting additional cost savings.

Jefferson Local receives around 67 percent of its $15 million in general fund revenue from local revenue, such as property tax and income tax. State sources account for approximately 33 percent of revenue.

“By far, the largest expenditure is for personnel, with salaries and benefits totaling 80 percent of total expenditures,” Ingles said. “The next largest is for purchased services, which includes repairs, meeting expenses, and services provided by the Madison-Champaign ESC (Educational Service Center).

“To curtail expenses, the administration and the board are discussing ways to improve efficiencies. Buildings and departments are being held to budgeted amounts, with any requests to be funded from current budgets. We are also utilizing CARES (Coronavirus Aid, Relief, and Economic Security) Act funds to help offset expenses related to PPE (personal protective equipment) and cleaning supplies.”

While the financial outlook might not be as bleak as previously predicted, Ingles said the district still needs to continue finding ways to operate as efficiently as possible while maximizing revenue sources, including the possibility of a reduction in force next year.

“The administration, staff and board are fully committed to being responsible stewards of our taxpayer provided funds, as well as our state funds,” Ingles said. “Our goal is to provide our students with the quality education that they deserve.”

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