Guest Column: Tax levy will help maintain high achievement in public schools

I recently participated in the Columbia Business Times Roundtable radio show. During the show, I was presented with numerous questions about the school district’s financial situation and the need for a tax levy increase. As a follow-up, I am providing additional information to some of the questions asked for the readership that may not have listened to the show.
Columbia Public Schools is an economic driver in this community and has been designated outstanding by Standard and Poor’s and the Missouri Department of Elementary and Secondary Education. In order to continue to maintain this same return on investment and keep our schools competative, Columbia Public Schools will ask voters to approve a 54-cent tax levy increase on April 8.
why do we need a tax levy increase?
In the last five years, the costs of employing teachers and staff have increased. Insurance benefits have increased by 47 percent, and retirement costs, which are set by state statute, are up by 44 percent. Costs of utilities and transportation are up 45 percent. Fuel for buses has increased 400 percent. Student enrollment has increased by more than 700 students. Secondly, funding from the state has leveled off and is, in fact, generating less revenue than previous years.
Over the last 18 years, the levy has increased three times. On average, an increase is needed every five to six years to maintain programs and competitive salaries. The last levy increase was in 2003. Based on an assessment by financial consultants, this levy increase, coupled with an internal budget reduction of $5 million, will result in financial stability for the next five years.
has the district ever reduced its levy?
Absolutely. While assessed valuation in Columbia is up, a state statute known as the Hancock Amendment does not allow a district to benefit more than the consumer price index.
As a result, the district reduced its ley by 24 cents in 2006.
how much will this cost the average tax payer?
The proposed levy increase equals a $102.60 annual increase (or $8.55 per month) on a home with an assessed valuation of $100,000.
how is the school district helping to balance the budget?
In order to keep the levy increase at a reasonable rate, the district will also cut its operating budget by $5 million. Together with the tax levy increase, this will allow the district to stop spending its reserves and maintain a balanced budget for a projected five years. The decision to make these cuts reflects our fiscal accountability to the taxpayers. Please note that my salary and the salaries of other administrators in the district will also be reduced in order to keep the initial cuts as far from the classroom as possible.
what are reserves? why does a school district need reserves?
The reserve fund is a savings account. These funds are meant to be used to cover payroll and district expenses when revenue funds are not available as well as to cover unpredictable emergency expenses. For example, the district uses reserves to help meet cash flow needs from month to month due to the timing of when local, state and federal funding revenues arrive.
how were the reserves spent?
Almost 70 percent went directly to current staff salaries and benefits. By adding $1,000 to the base of the salary schedule and then operating that schedule, $6.8 million of reserves were allocated directly to teacher and staff salaries. The remaining 30 percent included the 68 new positions added last year. These new positions were in support of academic excellence.
Examples include:
• 4.75 English language learner teachers to support an increased number of students entering this district with virtually no English skills;
• 6.5 special education teachers to address an increase in our special education population;
• 5 counselors and 2 assistant principals to deal with substance abuse prevention and student safety issues; and
• 12 classroom teachers to support increased enrollment in the districtwhy did the district spend down reserves in 2007-2008? Under the old funding formula, districts experienced huge funding swings from year to year when the state was not able to provide full funding. An example is the $10 million funding swing the district experienced in 1998 and a $6 million swing in 2003. Because of a healthy reserve fund, these funding swings did not result in layoffs or program cuts mid-year, as was the case with many other districts across the state.
For the last eight years, the district has maintained a reserve fund in the range of 24 percent of its operating fund. While this new funding formula, known as Senate Bill 287, is not as lucrative as the former funding mechanism was two years ago, it is more stable, therefore eliminating the need for high reserves that were required to balance the shortfalls of the previous funding mechanism.
As such, with the support of representatives of our teachers’ groups, this district chose to lower the reserve fund to 16 percent, or two months of salary and operational cost. We think this is fiscally prudent. Additionally, the district planned to address the use of these funds for ongoing costs by examining its own budgeting practices and looking at more precise spending practices.
On April 8, Columbia Public Schools will ask you to approve a tax levy increase to help us continue to provide the same high level of achievement this community has come to expect. Your support and trust of our public schools is vital to continued success.