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The district's budget

The school district’s budget is much more than just numbers and dollars; it is a reflection of the commitment to serving the needs of our community’s students and residents. A budget establishes priorities and provides a mechanism for evaluating the effectiveness of policy decisions. The district’s financial goals and objectives are outlined in its strategic plan and the financial portion immediately follows this budget message.

The timeline for budget development was notably lengthened to this fiscal cycle, to nine months, in order to sufficiently address three factors: declining student enrollment, the configuration of a replacement supplemental levy measure, and the elimination of local property tax revenues due to a state public school formulary funding change. The budget was compiled jointly by both the district’s administrators and directors and by our budget committee; the budget committee is comprised of district staff, two board trustees, five certified union members and patrons. This budget reflects the outcomes of their shared decision making processes and priorities while adhering to the current financial constraints of funding.

The budget is also a reflection of the district’s commitment to providing high quality educational services while adhering to a conservative fiscal policy. As the state of Idaho grappled with an increasing cry for property tax reform last year, legislative proposals for shifting all of the school districts’ funding to the state’s general fund were approved in a one-day special Legislative session in August, 2006. The impact has been particularly acute for our school district. The result of this legislative action shifted 13.7 million or 44.7 percent of our General Fund’s revenues to the state’s annual appropriation processes. We are now anchored to rely on state revenue sources for 78.6 percent of our operational funding as compared with 33.9 percent last year under the now repealed equalization formula which had been operative for the preceding 16 years.

Fiscal year 2008’s General Fund revenue sources are comprised of 78.6 percent state foundation funding, 18.5 percent in a two-year voter-approved local property tax instructional levy, and 2.9 percent from other sources. State funding is determined by Average Daily Attendance (not enrollment). The state support component utilizes a funding formula based on a unit count - a measurement of average daily attendance - and varying salary indexes for certified, classified, and administrative staff catagories.

Some highlights of the factors that influenced the structure of this budget are as follows:

• The average daily attendance, or unit count, of students attending our schools in 2006-2007 decreased by 5 percent compared to the prior year. The district projects this trend to continue in fiscal year 2007-2008, or a 3 percent decline. The budget is built based on a conservative student attendance projection for the 2008 school year; this budgeting approach allows the district funding "protection" under the state’s funding formula on a one-year only basis. It guarantees the district to receive funding equal to 99 percent of the prior year’s average daily attendance unit count.

• The highest priority for building this budget was to ensure a structurally balanced financial plan amidst a $1.2 million revenue gap in comparison to the prior year. This necessitated reducing staff in all categories. In March, 2007 voters approved a 2-year levy that shifted $600,000 in staffing dollars to local support dollars. The remaining half was eliminated through retirements and reconfiguration of positions: these included 13.07 teachers, 1 classified director, and several other classified support staff which reduced an additional $625,000 in salaries.

• Federal and state special project funds appropriations for fiscal year 2008 have decreased, as well. The effect of this shifted $150,000 in staffing and supply costs to our General Fund that in the prior fiscal year were paid through the special project appropriations.

• Through appropriation, the state of Idaho increased funding salary bases for all categories of staff by 3 percent for fiscal year 2007-2008. This represents a 1.9 percent increase for our district because we fund 4 million dollars more in staffing than the state’s funding formula generates, or 21 percent. In comparative terms, this aligns directly with school districts statewide where 144 million, or 20.9 percent, more in actual salaries is paid out annually than the state funds. Additionally, the state increased the minimum certified salary base to $31,000, up from $30,000.

• The district is faced with rising operational costs of fuel and utilities and with health, worker compensation, and liability insurance premium increases. Combined, these factors add an additional $488,000 in expenses over the prior year, or 2 percent of the overall operational budget. Providing single party health insurance for our benefited employees costs 8 percent of the overall operational budget, or $2 million.

• The state of Idaho enacted legislation starting in fiscal year 2007 that requires school districts to annually deposit into a school building maintenance fund monies equal to at least two percent (2 percent) of the replacement value of the school buildings. This change in the school funding law has an effect of loss of our local spending control, mandating our budget be structured to include $773,500 to meet this requirement in our general fund.

• After a cumulative two-year 25 percent reduction to all program supply budgets, a $30,000, or 10 percent increase is included for all programs for supplies. In addition, qualifying teachers will receive a $350/ teacher supply budget.

• The district has $65,000 in lease purchase debt obligation in fiscal year 2008 that must be financed through our General Fund revenues. The School Board is committed to improving the capital assets of the district. Although there are no capital improvement expenditures budgeted, $50,000 has been budgeted for facility planning related items.

State and federal authority is now diminishing or even eclipsing the local authority in school finance. Budgeting mandates on multiple categorical aid programs are expanding. Categorical in this context refers to the ways local officials can use state or federal funds. It mandates that school districts spend dedicated funds on target groups, goods, or services specified in the appropriation. As a result of such policy directives, structuring a budget that meets all of the requisites can create notable challenges that can vary from one appropriation cycle to the next cycle.

The aforementioned converging financial factors provided the basis for reducing the General Fund’s total budget by 3.68 percent compared to the amended fiscal year 2007 budget.

The above is a summary. A long form (400 pages) line item detailed document is available upon request. Call the district office at 208-263-2184.

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Author info

Dick Cvitanich Dick Cvitanich is the Superintendent of Schools for the Lake Pend Oreille School District. He has been an educator for 33 years, and became superintendent for LPOSD in 2006. He was educated at the University of Washington where he earned a BA in History and a Superintendent's Credential. He has been married to Diane for 32 years and they have raised three sons who "taught us as much as we taught them." "I have a passion for public education and the role it plays in our democracy. In my free time I read, ski ... come to think of it, I don't have that much free time."

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