State funding uncertainties plague LCS budget process

"There's more that we don't know than we do know," Superintendent Dr. Todd Wendt said Thursday afternoon when asked about state funding and the budget process.

"We do know the property valuations and we know we will not be using the ISL (Instructional Support Levy) as part of our budgeting process," Wendt said.

Property valuations for the Le Mars Community School District are $502,729,617 for the 2009-10 budget year. That's up from $471,051,708 for the 2008-09 budget year.

After two elections turned down the district's request to use the Instructional Support Levy, the district's third try was also petitioned. The board decided not to pursue an election.

"What we don't know is what the final allowable growth figure will be," Wendt said.

Last year, the Iowa Legislature established a 4 percent allowable growth for school districts.

This year when the governor submitted his budget, he called for a 4 percent allowable growth but proposed funding only 2 percent allowable growth, Wendt explained.

"The Legislature has not done anything to nail that figure down yet," Wendt said.

While the Legislature did set allowable growth at 2 percent for fiscal year 2011, that's not what school districts are worried about.

"There's still too much uncertainty about fiscal year 2010," Wendt said.

Funding could change with the next revenue estimate later in March from the Revenue Estimating Committee.

"If revenues are worse than they were in the previous estimate, they could come back and say they're not going to fund any allowable growth," Wendt said. "That would be pretty drastic."

There is also talk, Wendt said, about using the federal stimulus money to fund the additional 2 percent allowable growth for FY10.

"But even that is a huge unknown," Wendt said.

The Department of Education informed districts Thursday they don't have specific details about the stimulus money.

"It puts every school district in the state of Iowa in a bad position, every superintendent, and every school board in a bad position," he said.

In order for the district to meet the April 15 budget certification deadline, the budget needs to be filed with the board of education at their March 23 regular meeting. The budget is then published not less than 10 or more than 20 days in advance of the the budget hearing which will be April 13 at the board's regular meeting.

"Unless everything falls in line, we're not going to know all the answers for the budget we file with the board on March 23," Wendt said.

"More than likely, we'll have to talk about using that cash reserve levy," Wendt said. "That's a big discussion Monday night (March 9) for the board."

"When I look at our next couple years' projects on enrollment and what we know about allowable growth for the next couple years, this is the year where we need to do the most we can with our tax levy," Wendt said, "because in two years we may not be able to do enough."

Wendt said projections for 2009-10 see a smaller kindergarten enrollment, smaller than the graduating class of 2009.

There are also about 15 to 20 less students in school now than in October when the certified count was taken.

"If the numbers hold for fall, theoretically we could be down 25 to to 30 kids next fall," Wendt said.

Wendt said government officials have discussed partially funding next year's allowable growth with federal stimulus money for fiscal year '10 and fiscal year '11.

"There's no stimulus money in fiscal year '12," Wendt said. "They're (the Legislature) setting themselves up for a problem."

Wendt also projects the district will graduate classes of about 185 students in 2010 and 2011.

"If we don't have kindergarten classes coming in at 180 students, we have a built-in enrollment decrease each year," Wendt said.

"I think our enrollment will stabilize in the 145-160 student range. I don't see anything in the 180 range."

"We have to prepare for that. We have to not only look at this year's budget as trying to balance the budget, we better also be looking at it as a way to prepare ourselves for the next couple of years."

"I guess you've got to prepare for the worst and hope it doesn't happen. And in your preparation you hope you prepare enough," Wendt said.

"When we did lose 110 kids, we had a pretty good balance built up," Wendt continued. "We had to make some terribly hard cuts. But that balance is gone now. If we lose 60 kids in the next couple of years, it will be harder to deal with because that reserve money is not there."

Budget reductions have already cut close to $1 million from the budget, according to Wendt.

"The Board will have to look at utilizing the Cash Reserve Levy and possibly setting that money aside to build the reserves back up," Wendt said. "If you utilize the cash reserve levy to fund the operating budget, you're not helping your reserves any. You need to levy it, take that money out of the operating budget and set it aside."

The other option for the board is to take another look at the Instructional Support Levy (ISL).

"Our voters have told us that's not a direction they want us to go," Wendt said. "So the board's choices are very limited. Look at budget reductions and/or utilize the cash reserve levy."

At a meeting of Area Education Agency 12 superintendents Thursday, Wendt said the superintendents felt a lot of frustration.

"The timelines are coming and we don't have all the information we need to meet the timeline. And there's no talk about extending the timeline," Wendt said.

"What I'm going to do is budget for the worst and hope it comes out better," Wendt said.