In this post I would like to explain the facts behind the election on June 10, 2014. Skyline is asking to increase the budget authority of the Supplemental General Fund budget or what some people call the Local Option Budget (LOB). Skyline is asking to increase the LOB by 1%. Once this is approved then the Skyline Board of Education would have the authority to increase it to 3% at the July, 2014 board meeting. If this all happens then Skyline would have this 3% extra budget authority for the 2014-2015 school year. To keep it past the 2014-2015 school year Skyline would have to hold another election in June of 2015. If voters approve the 3% increase at the June, 2015 election then it becomes permanent.
Here is the June 10, 2014 election question.
"Shall the Board of Education of Unified School District No. 438, Pratt County, State of Kansas, be authorized by K.S.A. 72-6433 as amended, to increase its local option budget by an additional 1% of its state financial aid?”
If you support this increase vote "yes" if you do not support this increase vote "no".
Now that you know what Skyline is asking you may be have a few questions. I'm going to try and answer some of the questions that you might have.....
Why is Skyline wanting to raise the LOB authority? If we don't raise the budget authority then Skyline doesn't have the ability to access the "Unencumbered Cash Balance" in the LOB. Unencumbered Cash Balance is just a fancy term for carry-over. Since 2010-2011 the LOB carry over has been growing on an average of $55,500 per year. As of July 1, 2013 the balance was a little over $222,000. The 3% raise in LOB authority would allow us to access this carry-over. The carry-over is projected to be anywhere from $280,000 to $310,000 by July 1, 2014.
Why is there a LOB carry-over? When some people think of the term carry-over they think that a school is taking in more revenue than they are spending. In Skyline's LOB carry-over situation that isn't accurate. This carry-over is there because of three reasons. First reason, assessed valuations have been going up for the past several years. The second reason, 98% of the taxpayers are paying their taxes for the past several years, which leads to a low delinquency tax paying rate. The third and final reason, Skyline doesn't have the budget authority to spend the LOB carry-over. In other words, high valuations combined with a high rate of taxpayers paying their taxes and Skyline's inability to have the authority to spend this money leads to a large LOB carry-over.
Why doesn't Skyline have the budget authority to spend the LOB carry-over. The spending authority is set by the state. All Kansas schools LOB is set at a maximum amount 30% of the General Fund amount. For instance, if a school's total General Fund amount is one million dollars then the LOB budget is $300,000. Now that doesn't mean it uses $300,000 from the General Fund's $1,000,000. The 30% amount is a guideline which sets the LOB spending authority. With Skyline's LOB authority, along with majority of the schools across the state, it's maxed out at the 30%. The state does allow the 30% to go up to 33% but we have to go through the current election process and the board would have to approve moving from 31% to 33%.
How much will 3% generate for the LOB and what will the funds be used for at Skyline? At the current assessed valuation it would generate $105,000 in the 2014-2015 school year. Those funds will be used to offset a 20% assessment fee increase from our local Special Education Cooperative (SCKSEC). They are increasing their fee because starting next year they are required to provide health care for all of their staff. The assessment fees from SCKSEC are projected to increase by 40% (double from the 20% increase next year) in the 2015-2016 school year. Again, this is due to the rising costs of health care coverage for their employees. The generated funds will also cover the cut Skyline is taking with the school funding package signed into law by Governor Brownback. The increased fees and cut from the state will take up half of the generated revenue. The remaining revenue will go into the operating cost of our school district.
How much will it cost me as a taxpayer? That will vary on your own personal property valuation. It is estimated that the mill levy for the LOB could go up one-half to a full mill. One full mill on a $100,000 house will cost a home owner 95 cents a month. One half mill would be half of that amount. If your house is worth half or twice as much more than $100,000 then you would either cut it in half or double the 95 cents per month.
Is having a LOB carry-over good for a school budget or the taxpayers? Yes, it's nice to have cushion in the carry-over in case land valuations would go down or tax delinquency rates would increase. A good cushion to have is two or three mills worth of valuations. This is equal to $62,000 to $93,000 in LOB carry-over funds. Skyline is projected to have $280,000 to $310,000 for the 2014-2015 school year. Getting the 3% LOB authority increase would drop it down $105,000 which still leaves plenty of LOB cushion for the tax-payers and Skyline's LOB.
I hope that I thought of all of the questions you might have over the June 10, 2014 LOB Election. If not you are very welcome to reply at the bottom of this blog or give me a call at the school. Skyline does appreciate your consideration on voting "yes" on the LOB question.
Here is the June 10, 2014 election question.
"Shall the Board of Education of Unified School District No. 438, Pratt County, State of Kansas, be authorized by K.S.A. 72-6433 as amended, to increase its local option budget by an additional 1% of its state financial aid?”
If you support this increase vote "yes" if you do not support this increase vote "no".
Now that you know what Skyline is asking you may be have a few questions. I'm going to try and answer some of the questions that you might have.....
Why is Skyline wanting to raise the LOB authority? If we don't raise the budget authority then Skyline doesn't have the ability to access the "Unencumbered Cash Balance" in the LOB. Unencumbered Cash Balance is just a fancy term for carry-over. Since 2010-2011 the LOB carry over has been growing on an average of $55,500 per year. As of July 1, 2013 the balance was a little over $222,000. The 3% raise in LOB authority would allow us to access this carry-over. The carry-over is projected to be anywhere from $280,000 to $310,000 by July 1, 2014.
Why is there a LOB carry-over? When some people think of the term carry-over they think that a school is taking in more revenue than they are spending. In Skyline's LOB carry-over situation that isn't accurate. This carry-over is there because of three reasons. First reason, assessed valuations have been going up for the past several years. The second reason, 98% of the taxpayers are paying their taxes for the past several years, which leads to a low delinquency tax paying rate. The third and final reason, Skyline doesn't have the budget authority to spend the LOB carry-over. In other words, high valuations combined with a high rate of taxpayers paying their taxes and Skyline's inability to have the authority to spend this money leads to a large LOB carry-over.
Why doesn't Skyline have the budget authority to spend the LOB carry-over. The spending authority is set by the state. All Kansas schools LOB is set at a maximum amount 30% of the General Fund amount. For instance, if a school's total General Fund amount is one million dollars then the LOB budget is $300,000. Now that doesn't mean it uses $300,000 from the General Fund's $1,000,000. The 30% amount is a guideline which sets the LOB spending authority. With Skyline's LOB authority, along with majority of the schools across the state, it's maxed out at the 30%. The state does allow the 30% to go up to 33% but we have to go through the current election process and the board would have to approve moving from 31% to 33%.
How much will 3% generate for the LOB and what will the funds be used for at Skyline? At the current assessed valuation it would generate $105,000 in the 2014-2015 school year. Those funds will be used to offset a 20% assessment fee increase from our local Special Education Cooperative (SCKSEC). They are increasing their fee because starting next year they are required to provide health care for all of their staff. The assessment fees from SCKSEC are projected to increase by 40% (double from the 20% increase next year) in the 2015-2016 school year. Again, this is due to the rising costs of health care coverage for their employees. The generated funds will also cover the cut Skyline is taking with the school funding package signed into law by Governor Brownback. The increased fees and cut from the state will take up half of the generated revenue. The remaining revenue will go into the operating cost of our school district.
How much will it cost me as a taxpayer? That will vary on your own personal property valuation. It is estimated that the mill levy for the LOB could go up one-half to a full mill. One full mill on a $100,000 house will cost a home owner 95 cents a month. One half mill would be half of that amount. If your house is worth half or twice as much more than $100,000 then you would either cut it in half or double the 95 cents per month.
Is having a LOB carry-over good for a school budget or the taxpayers? Yes, it's nice to have cushion in the carry-over in case land valuations would go down or tax delinquency rates would increase. A good cushion to have is two or three mills worth of valuations. This is equal to $62,000 to $93,000 in LOB carry-over funds. Skyline is projected to have $280,000 to $310,000 for the 2014-2015 school year. Getting the 3% LOB authority increase would drop it down $105,000 which still leaves plenty of LOB cushion for the tax-payers and Skyline's LOB.
I hope that I thought of all of the questions you might have over the June 10, 2014 LOB Election. If not you are very welcome to reply at the bottom of this blog or give me a call at the school. Skyline does appreciate your consideration on voting "yes" on the LOB question.
