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

Budget Update

Board of Education – February 5, 2020 Kathleen Askelson, Chief Financial Officer

FAQs and Clarifications

AGENDA

 Budget Update 2020/2021  FAQs and Clarifications

District Budget Update

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

2020/2021 STATE REVENUE Jeffco Funding Assumptions JEFFCO’S STATE FUNDING

$17.0M

JEFFCO’S REVISED TOTAL GENERAL FUND INCREASE

$15.2M

LESS PASS THROUGH TO Charters, Colorado Preschool Program (CPP), and Innovation Schools (est)

$(1.8M)

Tool used to balance the state budget.

Decreasing the budget stabilization factor provides additional funds for the district. 2020/2021 ASSUMPTIONS BUDGET STABILIZATION FACTOR

Quick Facts about budget stabilization factor:

• FY 2020 buy down was $100M
• Factor peaked in 2012/2013 at $1.0B statewide
• Cumulative impact loss to Jeffco since inception

(2010/2011 through 2019/2020) $755M

For 2020/2021, the governor’s proposal will decrease the budget stabilization factor by: $52M Statewide Jeffco’s Share $5.2M Increases Jeffco’s Per Pupil Revenue by $63 2020/2021 ASSUMPTIONS BUDGET STABILIZATION FACTOR

JEFFCO PUBLIC SCHOOLS Total Per Pupil Funding for 2020/2021 per the governor’s revised proposal

(before budget stabilization factor applied)

$9,067 $8,495

Funding (after budget stabilization factor applied) $(572)

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

2020/2021 POTENTIAL EXPENDITURE ASSUMPTIONS (ESTIMATES)

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

The district isn’t transparent with its finances… The district has a billion dollar budget… The district has excessive fund balance… Marijuana money fixed everything for K-12 education…

The district is administrative heavy…

Common Myths

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 FAQs and Clarifications

The district is administrative heavy…

Common Myths #1

When comparing to other districts, Jeffco continues to be one of the lowest in administrative costs per student:

The Colorado Department

• f Education’s

Financial Transparency for Colorado Schools website can be useful when comparing districts across the state.

$40 $60 $80 $100 $120 $140 $160 $180 FY12‐13 FY13‐14 FY14‐15 FY15‐16 FY16‐17 FY17‐18 District Admin Costs (per student)

Boulder Valley Cherry Creek Jeffco Public Schools Denver Public Schools Douglas County

The district isn’t transparent with its finances…

Common Myths #2

Colorado requires all school districts to comply with C.R.S. 22-44-304

School finance is complex, so prior to the Colorado Revised Statute (C.R.S.) being implemented, the district deployed its own transparency website. This site was used as an example for the statutory requirements. The Jeffco website currently contains more information than required by statute:

 www.jeffcopublicschools.org Under About Jeffco > Finance & Budget > Financial Transparency

The district has excessive fund balance…

Common Myths #3

The district strategically built reserves back from its lowest point in 2011/2012. Because districts can classify reserves differently, comparing total fund balance is one way to

• benchmark. When comparing total reserves,

Jeffco is not the largest in the state.

Based on guidance from the Government Finance Officers Association (GFOA) and the Financial Oversight Committee, unassigned reserves are targeted between 8 to 16 percent of expenditures.

FY2018 Fund Balance as % of Operating Budget

The district has excessive fund balance…

Common Myths #3 (cont’d)

This chart compares fund balance of the 20 largest districts sorted by per pupil.

FY2018 Fund Balance sorted by Per Pupil

The district has a billion dollar budget…

Common Myths #4

This is only true when adding all the individual fund budgets together. But, how does that compare to other districts our size:

Data from the 2017 U.S. Census Bureau Public Elementary- Secondary Education Finance Data and researching individual districts’ financial information helps to compare.

District Total Appropriated Budget Enrollment Lee County, FL $1,456,048,981 92,686 Denver, CO $1,508,574,193 91,138 Albuquerque, NM $1,346,491,635 90,651 Prince William, VA $1,435,906,641 89,345 Fort Worth, TX $1,128,602,071 87,428 Jeffco Public Schools $1,008,008,698 86,731 Davidson County, TN $1,175,000,400 85,163 Austin, TX $1,573,930,628 83,067 Baltimore, MD $1,349,032,409 82.354 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

The district has a billion dollar budget…

Common Myths #4 (cont’d)

Often, it is questioned, with a billion dollars, why can’t we do more for our students. It’s important to understand each of the funds to see what is really available to make change.  The Debt Service Fund, Campus Activity Fund, Food Service Fund, Grants Fund and Enterprise Funds revenues cannot be repurposed for general school operations.  The Capital Fund, Internal Services Funds and Transportation Fund are sustained by transfers or billings to the General Fund. Adding their budgets to the General Fund creates double counting of funds.

Information on the district’s fund structure and purposes can be found in the Adopted Budgets, Comprehensive Annual Financial Reports, and Quarterly Reports.

Marijuana money fixed everything for K-12 education…

Common Myths #5

The district has received $4.6M to date from the marijuana tax in the form of grants with requirements on how to spend. This was not the funding windfall envisioned by many voters. See the next chart for the flow of marijuana taxes.

Amendment 64 Passed in 2010 with promises

• f more

funding for schools in the state.

Marijuana money fixed everything for K-12 education…

#5 (cont’d)

Common Myths

My property tax bill increased so the district has more money this year…

#6

26.252 of the General Fund mill levy is used to help fund the state’s Total Program calculation for the district. This mill rate is frozen.  If assessed values increase, the additional property tax collected will be used to fund the state’s Total Program and the amount the state backfills to Jeffco will decrease.  The district does not receive additional funds from increased assessed values. The state benefits from the increase.

Jeffco has two types

• f mill levies

that show on property tax statements: Bond Redemption Fund and General Fund.

Common Myths

The district has more new money from the state each year, why is there a problem…

#7

Since 2012/2013 state funding has increased; however, the ongoing Budget Stabilization Factor demonstrates that funding does not keep pace with inflation and growth.  There have been new funds, just not enough to cover rising costs and needs of students.  See the next slide for a visual of the Budget Stabilization Factor.

The 1994 School Finance Act is supposed to fund inflation and student growth.

$0 $1 $2 $3 $4 $5 $6 $7 $8 $9

The district has more new money from the state each year, why is there a problem…

#7 (cont’d)

SCHOOL FINANCE Formula (Total Program)

FY 2019-20 (preliminary*)

• $572.4M, 7.1%

(this is down from previous year which was $672.4M, 8.7%)

Billions of Dollars

Budget Stabilization Factor Actual Total Program

Source: Colorado Legislative Council, State of Colorado Jan. 2020

*FY 2019-20 totals are preliminary per the December forecast.

Common Myths What about persistent FAQs?

 The district will always be challenged to provide clarifications on frequently 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

• wn conclusions.

 Keep doing the great work we do…

QUESTIONS