Budget Update FAQs and Clarifications Board of Education February - PowerPoint PPT Presentation

Budget Update FAQs and Clarifications Board of Education – February 5, 2020 Kathleen Askelson, Chief Financial Officer

AGENDA  Budget Update 2020/2021  FAQs and Clarifications

District Budget Update

2020/2021 ASSUMPTIONS GOVERNOR’S PROPOSAL Proposed statewide assumptions per the revised Governor’s Budget Request released in November. 1.9% inflation – including categorical funding 1,132 student enrollment growth $52M decrease to budget stabilization factor

2020/2021 STATE REVENUE Jeffco Funding Assumptions LESS PASS THROUGH TO Charters, Colorado Preschool JEFFCO’S JEFFCO’S Program (CPP), STATE REVISED TOTAL and Innovation FUNDING GENERAL FUND Schools (est) INCREASE $17.0M $(1.8M) $15.2M

2020/2021 ASSUMPTIONS BUDGET STABILIZATION FACTOR Tool used to balance the state budget. Decreasing the budget stabilization factor provides additional funds for the district.

2020/2021 ASSUMPTIONS BUDGET STABILIZATION FACTOR For 2020/2021 , the governor’s proposal will JEFFCO PUBLIC SCHOOLS decrease the budget stabilization Total Per Pupil Funding for 2020/2021 factor by: per the governor’s revised proposal  $52M Statewide ( before budget stabilization factor applied)  Jeffco’s Share $5.2M $9,067  Increases Jeffco’s Per Pupil Revenue by $63 $(572) Quick Facts about budget stabilization factor:  FY 2020 buy down was $100M $8,495  Factor peaked in 2012/2013 at $1.0B statewide Funding ( after budget  Cumulative impact loss to Jeffco since inception stabilization factor applied) (2010/2011 through 2019/2020) $755M

2020/2021 POTENTIAL EXPENDITURE ASSUMPTIONS (ESTIMATES)  Compensation Variables  Steps/Lanes/Quartiles $17M (w/benefits)  Scalable: Cost of Living $6.3M per % increase (w/benefits)  PERA Employer Contribution Increase $2.6M  School Needs  SAC Recommendations  District Unified Improvement Plan (DUIP) Support  Division Needs  Strategic Plan Initiatives  Central/School Support  Mandates/Compliance  Enrollment changes – (350) $3M

NEXT STEPS  Further budget information throughout the legislative session  Reduction process to generate up to $5M in savings for repurposing  Increase requests limited to high needs, compliance and mandates. All others only to be recommended if state funding increases

FAQs and Clarifications

Common Myths Common The district is administrative heavy… FAQs and The district isn’t transparent with its finances… Clarifications The district has excessive fund balance… The district has a billion dollar budget… Marijuana money fixed everything for K-12 education… My property tax bill increased so the district has more money this year… The district has more new money from the state each year, why is there a problem…

Common #1 The district is administrative heavy… Myths When comparing to other districts, Jeffco The Colorado continues to be one of the lowest Department in administrative costs per student: of Education’s Financial District Admin Costs (per student) Transparency for $180 Colorado Schools $160 website can be $140 useful when comparing $120 districts across $100 the state. $80 $60 $40 FY12‐13 FY13‐14 FY14‐15 FY15‐16 FY16‐17 FY17‐18 Boulder Valley Cherry Creek Jeffco Public Schools Denver Public Schools Douglas County

Common #2 The district isn’t transparent with its finances… Myths School finance is complex, so prior to the Colorado Colorado Revised Statute (C.R.S.) being requires all implemented, the district deployed its own school districts transparency website. This site was used as an to comply with example for the statutory requirements. The C.R.S. 22-44-304 Jeffco website currently contains more information than required by statute:  www.jeffcopublicschools.org Under About Jeffco > Finance & Budget > Financial Transparency

Common #3 The district has excessive fund balance… Myths The district strategically built reserves back from its lowest point in 2011/2012. Because Based on guidance districts can classify reserves differently, from the Government Finance comparing total fund balance is one way to Officers Association benchmark. When comparing total reserves, (GFOA) and the Jeffco is not the largest in the state. Financial Oversight Committee, FY2018 Fund Balance as % of Operating Budget unassigned reserves are targeted between 8 to 16 percent of expenditures.

Common #3 (cont’d) The district has excessive fund balance… Myths This chart compares FY2018 Fund Balance sorted by Per Pupil fund balance of the 20 largest districts sorted by per pupil.

Common #4 The district has a billion dollar budget… Myths This is only true when adding all the individual Data from fund budgets together. But, how does that the 2017 U.S. compare to other districts our size: Census Bureau Public District Total Appropriated Budget Enrollment Elementary- Lee County, FL $1,456,048,981 92,686 Secondary Denver, CO $1,508,574,193 91,138 Education Albuquerque, NM $1,346,491,635 90,651 Finance Data Prince William, VA $1,435,906,641 89,345 and researching Fort Worth, TX $1,128,602,071 87,428 individual Jeffco Public Schools $1,008,008,698 86,731 districts’ financial Davidson County, TN $1,175,000,400 85,163 information Austin, TX $1,573,930,628 83,067 helps to Baltimore, MD $1,349,032,409 82.354 compare. Anne Arundel, MD $1,121,630,500 81,379 Alpine, UT $878,054,103 78,957 Sources: Source: US Census Bureau 2017 Public Elementary-Secondary Education Finance Data ; total budget figures from each district’s respective website 2016/2017

Common #4 (cont’d) The district has a billion dollar budget… Myths Often, it is questioned, with a billion dollars, Information on why can’t we do more for our students. It’s the district’s important to understand each of the funds to fund structure see what is really available to make change. and purposes can be found in  The Debt Service Fund, Campus Activity the Adopted Fund, Food Service Fund, Grants Fund and Budgets, Enterprise Funds revenues cannot be Comprehensive Annual Financial repurposed for general school operations. Reports, and  The Capital Fund, Internal Services Funds Quarterly and Transportation Fund are sustained by Reports. transfers or billings to the General Fund. Adding their budgets to the General Fund creates double counting of funds.

Common Marijuana money fixed everything #5 Myths for K-12 education… The district has received $4.6M to date from the marijuana tax in the form of grants Amendment 64 with requirements on how to spend. Passed in 2010 with promises of more funding for schools in the state. This was not the funding windfall envisioned by many voters. See the next chart for the flow of marijuana taxes.

Marijuana money fixed everything #5 (cont’d) for K-12 education…

Common My property tax bill increased so #6 Myths the district has more money this year… 26.252 of the General Fund mill levy is used to Jeffco has help fund the state’s Total Program calculation two types for the district. This mill rate is frozen. of mill levies  If assessed values increase , that show on the additional property tax collected property tax statements: will be used to fund the state’s Bond Total Program and the amount Redemption the state backfills to Jeffco Fund and will decrease . General Fund.  The district does not receive additional funds from increased assessed values. The state benefits from the increase.

Common The district has more new money from the state #7 Myths each year, why is there a problem… Since 2012/2013 state funding has increased; however, the ongoing Budget Stabilization Factor demonstrates that The 1994 School Finance funding does not keep pace with Act is supposed inflation and growth. to fund inflation  There have been new funds, just not enough and student to cover rising costs and needs of students. growth.  See the next slide for a visual of the Budget Stabilization Factor.

The district has more new money from the state #7 (cont’d) each year, why is there a problem… SCHOOL FINANCE Formula (Total Program) $9 Billions of Dollars FY 2019-20 $8 Budget (preliminary*) Stabilization Factor -$572.4M, 7.1% $7 (this is down from $6 previous year which was $672.4M, $5 8.7%) $4 Actual Total Program $3 $2 $1 $0 *FY 2019-20 totals are preliminary per the December forecast. Source: Colorado Legislative Council, State of Colorado Jan. 2020

Common Myths What about  The district will always be challenged persistent to provide clarifications on frequently FAQs? asked questions; the best way to address these is with facts and information.  Provide community members with the tools to do research and form their own conclusions.  Keep doing the great work we do…

QUESTIONS