Lexington One begins 2015–2016 budget process
May 6, 2015
Lexington One Superintendent, Dr. Karen Woodward, opened the budget workshop by saying, “While the need for improved preparation of students for college and career demands is increasing and the accountability to schools and districts to prepare those students is increasing, the bottom line is that funding for public education is at a crisis point.
“Federal and state funding is significantly insufficient to meet the needs of our special needs students, straining local districts financially and programmatically. Act 388 creates an unbalanced revenue system that works against growing districts, overburdens businesses and provides insufficient funding for all school districts.”
In the workshop, which serves as first reading of the budget, Lexington One administrators recommended a $228,984,170 general fund budget — about a 3.9 percent increase over Lexington One’s current operating budget for 2014–2015 of $220,425,851. The projected $228,984,170 in proposed operating expenditures consists of about 87.4 percent salaries and related costs, 7.2 percent for programs and services, and 5.4 percent for utilities and maintenance.
The proposed budget shows an increase of $8,264,540 in employee salaries and related costs (4.3% increase) and an increase of $293,779 in programs and services (1.0% increase).
It includes a step increase (about $2.9 million) and a one percent salary increase for all employees (about $1.7 million), an additional 0.5 percent increase for teachers with 0–23 years (about $446,000), an additional 0.5 percent increase for bus drivers 0–23 years (about $34,000), health and retirement cost increases (about $2.8 million) and budgets $8 million from fund balance ($1 million less than last year).
The state allows districts to increase millage by the Act 388 formula (the percent of growth in school district population and the CPI). For 2015–2016, that formula would allow this district to increase millage by 11.62 mills, and the district proposes adding those mills to fund the budget as it currently appears.
Since Act 388, millage is not added to owner-occupied homes but is added to businesses, automobiles, etc. with a 11.62 mill increase, a resident with a business valued at $100,000 would see taxes increase about $70 ($100,000 X .06 percent assessment rate X additional mills). Each mill brings in about $235,681 in revenue to the district. The district currently levies 278.21 mills for operations.
Budget Overview
Many things impact a school district’s general fund budget each year — student growth, student to teacher ratios, tax collection rates, property tax relief, changes in other revenue from state and federal government, program needs, mandates such as increases in the cost of the district employee health insurance, retirement or other benefits. Here are some of the most significant things affecting this budget.
Growth
Lexington One is the largest school district in Lexington County — geographically and in student enrollment. The district is 360 square miles (much still undeveloped) while Lexington County is 701 square miles.
The district had an average daily membership of 23,953 students (not including 3- and 4-year-olds) on the 135th day of this school year (2014–2015). This is an increase of 589 students (2.5%) over the 2013–2014 school year’s 23,364 average daily membership.
Lexington One remains one of the state’s fastest growing school districts growing 5,265 students over the last 10 years (from 18,688 ADM in 2004–2005).) Administrators anticipate a projected growth of 294 students for the 2015–2016 school year. In fact, the district ranks seventh in the state in enrollment.
Revenue
South Carolina’s main funding mechanism for schools is the “Base Student Cost,” part of the Education Finance Act (EFA) approved in 1977. This legislation was intended to provide each student with instruction that was appropriate for their level (primary, elementary, secondary, disability status).
Districts continue to be funded by the state at lower levels than the Budget and Control Board’s formula recommends. According to the Budget and Control Board, the Base Student Cost in 2014–2015 should be $2,742. Instead, it is $2,120 which is below the Budget and Control Board’s 2005–2006 school year formula ($2,290).
In the proposals put forth by the legislature so far for Fiscal Year 2016, the Base Student Cost is projected to be $2,220 per pupil, an increase of $100 per student over this year’s BSC of $2,120 per pupil. This is still under the Budget and Control Board’s recommendation of $2,801 per pupil for Fiscal Year 2016.
In actuality, this district will not receive $2,220 per pupil from the state. Lexington One will actually receive $1,820 per pupil and is required to fund the remaining $400 per pupil ($9 million) out of local money because of something called Maintenance of Effort. It ensures that the same dollars of inflated or deflated value are available to educate each child in a school district each year. It was designed to keep the value of a dollar in a district budget in line from year to year and provide a minimum floor of funding.
In addition, in its proposed budget the legislature is funding the $100 increase per pupil in BSC by eliminating Lottery funding to school districts and redirecting that Lottery funding to the EIA BSC.
This year, Lexington One received $709,462 in Lottery Funds, which it used to pay salaries. As a result, the district either cut or moved to General Fund, 5 FTE mathematics coaches, 6 FTE Technology Integration Specialists and 1 FTE literacy coach.
In addition, the district anticipates once again losing the “hold harmless” funding (designed to ensure that no district lost money due to the changes in the calculation of the Index of Taxpaying Ability). This year the district lost about $2 million in funding due to the loss of the hold harmless money and anticipates losing the same amount again next year.
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