School board decreases capital outlay mill levy for 2010-2011 budget
After a lengthy discussion Monday night, the Baldwin School Board approved the 2010-2011 budget, which included a 3-mill decrease from the previously published budget.
All six school board members at the meeting approved the annual budget. Board Member Blaine Cone wasn’t at the meeting. The original budget called for an increase of 7.497 mills, but the board approved a 3-mill decrease to the Capital Outlay budget. The overall mill levy will still increase by 4.497 mills this year.
“There is still an increase,” Supt. Paul Dorathy said. “The mill levy overall is going up 4.497 mills, which can be a significant amount of dollars for some people. Last night, the board did look at different options and decided to sacrifice some of the Capital Outlay mills in order to reduce the mill levy and lessen the increase to the taxpayers. It’s still an increase, but not as bad as what was published.”
The majority of Monday night’s budget discussion centered on the mill levy and how the board could decrease it. Dorathy told school board members it could decrease the Local-Option budget or the Capital Outlay budget. He explained that the district can put dollars from the LOB into the Capital Outlay, if needed, but not vice versa.
Therefore, he suggested decreasing the Capital Outlay budget, which was set at its peak of 8 mills. The board had to publish the full 8 mills after its July 22 meeting, because it can decrease the mill levy at the budget hearing, but it may not increase the mill levy after it’s published.
The budget was published at 73.158 mills, which was an increase from last year’s 65.661 mills and 56.159 mills two years ago. The November 2008 bond issue is in its second year of payments, which means its mills are increasing. That 3.47-mill jump was expected this year.
“The bond and interest was a planned increase,” Dorathy said. “It was in the payment plan all along. We told the public there would be an average of 10.5-mill increase over 20 years. So the first year was right at that and the second year it went up a bit more. Then next year it should drop off, according to our payment plan.”
The large majority of the rest of the increase, 4.022 mills, is in the LOB. Dorathy explained the increase Monday night and he further explained it Tuesday.
“There are three reasons the LOB went up this year,” Dorathy said. “The first reason is the LOB goes through a cycle where one year it goes up and one year it goes down. That varies about 0.5 mills and this happens to be the year that it went up. So there was about 0.5 mills that it went up because of its normal cycle. We expect that to drop down next year.
“The second part of that was an over estimation of motor vehicle taxes,” he continued. “The county had estimated very high and those taxes didn’t materialize by almost $100,000. That then affected the mill levy, because it had to make up for the taxes it thought it was going to have. Basically, the LOB went up fairly significantly because of that offset of taxes. Then the third reason was because the LOB is 30 percent of the general fund and the general fund increases because of the new facilities weighting. All three of those reasons hit at the same time, which made it jump more than it should have.”
After explaining the reason for the increase, Dorathy said the Eudora School District was in a similar situation last year because of a bond issue that passed a year before Baldwin’s. He added that Eudora dropped its Capital Outlay mill levy by 4 mills.
Board Member Scott Lauridsen suggested a 4-mill decrease, but Board Member Ruth Barkley wanted a 2-mill decrease. School Board President Alison Bauer and Barkley both said they heard from district patrons about the large mill levy increase, so they wanted to decrease it if possible.
In the end, the board unanimously approved a 3-mill decrease from its Capital Outlay budget. According to Dorathy, each mill brings in around $74,000 in taxes, so the district will lose approximately $222,000 in Capital Outlay funds this year.
“That was the right way to do it,” Lauridsen said. “It gives us the most flexibility, depending on what may or may not happen with the state budget mid-year. I’m OK with going back to 3 mills, because I understand we’ve deferred some things for too long. It’s a compromise for a lot of people, because some wanted to do nothing and others wanted to do 2 mills. I’m willing to compromise to 3, because it’s the right move.”
Although the district will lose 3 mills from the Capital Outlay budget, it will receive a large increase to its budget from new facilities weighting money. That state-funded money will come in for two years because of the new Baldwin Elementary School Primary Center.
For each full-time student in the building, the district will receive $1,003 and half of that amount for each half-time student. The school board said some of those extra funds might be used for capital projects if the state doesn’t cut education funding during the school year.
“We are benefiting from the mill levy increase that we are incurring because of the bond and the new facility money,” Lauridsen said. “There is a benefit to that for our budget. We do have some of that money that we can pull back for capital projects. We had a nice discussion and everyone was comfortable that we can defer again, since we’ve done it in the past.”