Budget Q (Minus the A)

Here's a series of budget questions posed by one of our indefatigable commenters.

Will answers ever be found? Perhaps we'll know tonight at 7:30 when the monthly business meeting of the Court of Emperor William I is held.

Jon has left a new comment on your post "George Mount Retiring":

This belongs further down, but below are some Budget Thoughts & Questions, based on looking at the 4/8/09 Powerpoint presentation in the 2009-2010 Budget Links.

Revenues

1. Overall, budgeted revenues are up $124k over last year ($18,895k vs. $18,771k).

2. Where’s the extra revenue coming from? The Federal government.

3. Local revenues are down $211k ($11,962k vs. $12,173k).

4. State revenues are essentially flat (+2k, $5,553k vs. $5,551k).

5. Federal revenues are up $332k ($1,231k vs. $899k).

6. Why are Local revenues down $211k?

Even thought the millage rate stays the same as last year (187.3 mils), this budget assumes a $102k reduction in Real Estate Tax revenues ($10,617k vs. $10,719k). That and a $147.5k (50%) drop in Investment Earnings ($147.5k vs. $295k) overwhelm a $67k increase ($102k vs. 35k) in “Rentals”.

Question: How is this near-tripling of Rental revenue going to be achieved?

7. Why are State revenues flat (+2k)?

A $338k increase in basic education funding ($3,265k vs. $2,926k) is virtually wiped out by the loss of a $102k EAP Grant for Tutoring, and a $201k drop in Extra Grant funding ($530k vs. $329k).

Question: Why did we lose this $303k in grant funding? Hopefully it wasn’t from prior cuts in grant writing resources.

8. Why are Federal revenues up (+$331k)?

Mostly from a $297k increase in 21st Century Grant funding ($919k vs. $622k).

Question: Isn’t this grant funding targeted to certain programs, and not for basic education, so it doesn't necessarily replace lost Local & State revenue?

9. Conclusions: Overall revenues are up, but mostly from higher Federal 21st Century Grant funding. But this grant funding is likely "earmarked" for certain programs, so it doesn't necessarily replace lost Local & State revenue. That means overall basic education revenues look down.


Expenses

1. Overall, expenses are down $988k ($18,895k vs. 19,883k).

2. Where are the expenses dropping?

The 6 areas with changes > $50k are:

a. 1200 (Special Programs) is down $429k ($3,454k vs. $3,883k). Salaries are up $223k ($1,211k vs. $988k), but “Purchased Professional & Technical Services” dropped a whopping $694k ($1,205k vs. $1,899k).

Questions: What makes up these Purchased Professional & Technical Services? Why such a drastic drop?Is something being deferred until next year? Why? Was something pricey bought last year that isn't being bought this year?

b. 1300 (Vocational Education) is down $81k ($758k vs. $839k), mostly from an $89k drop in “Other Purchased Services ($537k vs. $626k).

Question: Is this from Morrisville’s reduced Tech School share under the funding formula this year?

c. 2100 (Support Services) is down $119k. Salaries are up $56k ($419k vs. $363k), but “Purchased Professional & Technical Services” dropped $176.5k (from $182k to $5.5k, a 97% drop).

Questions: Again, what makes up these Purchased Professional & Technical Services? Why such a drastic drop? Is something being deferred until next year? Why? Was something pricey bought last year that isn't being bought this year?

d. 2300 (Administration) is down $208k, mostly from a $164k drop in Salaries ($495k vs. $659k), and a $21k drop in Benefits ($148k vs. $169k).

Question: Is this from the loss of Kate Taylor and Karen Huggins, and not replacing Asst. Principals? If so, I just hope this 3.5 mil savings is worth it in the long run.

e. 2600 (Maintenance) is down $112k ($1,622k vs. $1,734k, mostly from reduced Purchased Property Services (-$53k) and reduced Supplies (-$59k).

Question: Is this from not having to maintain MR Reiter as much? If so, it isn’t that big of a drop in overall maintenance spending (< 1.9 mils, < 6.5% drop in Maint. budget, but 1 out of 3 buildings is 33.3%, and MR Reiter’s 47,397 ft2 is 20% of the combined 237,689 ft2 of all 3 buildings). At < 1.9 mils, it’s certainly not the FORTUNE Bill Hellmann said we’d save.

f. 5100 (Debt Service) is up $67k ($997k vs. $930k).

Questions: Does this year's installment on paying off the $2.5 million in Bond Defeasement Expenses Hellmann didn't tell anybody about factor into this? Otherwise, why is Debt Sevice up when most of the bond money was defeased – didn’t that drastically reduce the debt?

3. Conclusions: reduced Administration and Maintenance cut expenses by $320k, about 1/3rd of the total $988k drop in expenses. Special Programs, Vocational Education, and Support Services dropped a combined $629k. Salaries are generally still rising, so a concern is that the cuts are coming from items that effect educational delivery.

Other Misc. Comments

1. p.6 --> some of the bar graph heights look wrong, based on other data in the presentation. For example, the 2008-09 Local Revenue is $12.17 million, but the bar height is over $14 million. State Revenues for 2008-09 ($5.551 million) and 2009-10 ($5.553 million) are virtually the same, but the bar is significantly higher for 2009-10.

2. p. 14 - Note that starting in 2005-06, everybody's property tax assessment was increased by a factor of 4, and the corresponding tax millage rate was reduced by a factor of 4. So if you really want to compare apples-to-apples on millage rates, you need to divide the years prior to 2005-06 by 4 - or multiply 2005-06 on by 4. Otherwise, some might be tempted to think that Sandy Gibson is really a hero because she presided over an astonishingly drastic cut in school taxes.

3. p. 38 - Looks like last year’s budget was helped by depleting the Fund Balance by $1.112 million (from $2.793 million to $1.681 million). Assuming 1 tax mil is about $60k, without this depletion of the Fund Balance, it looks like there would have been a 19 mil (~10%) tax increase last year.

So last year, the 2 main things the board did to balance the budget/hold the line on taxes were:

a. Get a ~$1+ million one-shot-deal from defeasing most of the bond money (at a long-term cost of $2.5 million);

b. Dip into the piggy bank to the tune of $1.112 million - money that was left to them by those evil "prior boards".

The budget projections from 2010-13 show the Fund Balance being further depleted by $1.456 million by 2013, all the way down to a mere $225k.

4. p. 38 - these budget figures show a Real Estate Tax collection rate of 93.5% throughout, but the earlier slides all seem based on a 94% collection rate (see p. 5). Why the difference? Which figure is right/more accurate?