Coming off of a budget season that started with an $8 million revenue shortfall and was described by more than one Camas School District leader as “an anomaly,” members of the Camas school board are now weeks away from approving a 2019-20 budget.
Board members will hold the official 2019-20 budget hearing — and are expected to pass the $147.5 million budget — on Monday, Aug. 26.
After that, the board could look to local levy rates to help avoid similar revenue shortfalls in coming years.
Camas School District (CSD) voters approved a local levy rate of up to $3.06 per $1,000 assessed property value in 2017. In 2018, state legislation meant to make Washington State school district funding more equitable capped local school levy rates at $1.50 per $1,000.
Although Camas schools now get more funding from the state, the $1.50 levy cap meant the district would experience a revenue shortfall in its 2019-20 budget.
A budget committee formed by CSD Superintendent Jeff Snell worked throughout the winter months to come up with a solution that wouldn’t drastically change the way schools in Camas operated.
In the end, the committee recommended a “split,” with half the shortfall — about $4 million — coming from budget cuts and the other half covered by general fund reserves.
Jasen McEathron, the district’s director of business services, reviewed the budget and levy rate decisions for the school board on Monday, July 22.
“The budget committee was a unique and instrumental part of this process,” McEathron said. “And Camas should be proud of this process, (which) engaged the community and stakeholders.”
The proposed budget calls for a $3.7 million deficit to be covered by general fund reserves, which would leave $5.5 million in the general fund balance, or about 5.5 percent of the school district’s operating expenses.
Historically, McEathron told the board Monday, CSD has “had closer alignment between (its) revenues and expenditures.”
Of the $101.4 million in expenditures in the 2019-20 budget, the majority — 88 percent — are for salaries and benefits for certificated teachers and classified staff. The rest of the general fund expenses include materials and supplies (4 percent); purchased services, which include things like cafeteria food (7 percent); travel (less than 1 percent); and capital outlay (1 percent).
The district made nearly $4.5 million in cuts, including: $750,000 in the central office; $1.9 million to certificated teachers; $100,000 in school administration; $440,000 to classified instruction; $420,000 in classified operations; and $850,000 in non-staffing costs.
McEathron said unexpected retirements and resignations resulted in “higher than estimated savings and fewer (staff position) reductions.”
After approving the 2019-20 budget, the school board will begin to figure out which levy rate will help get voters back to the $3.06 per $1,000 levy rate they approved in 2017.
“What happened with the ‘McCleary Fix’ is that the state property taxes increased while local levy decreased,” Snell told the Post-Record Tuesday.
So when district leaders considered the $3.06 per $1,000 rate Camas voter approved in 2017, they wanted to know which levy rate — combined with the higher state property tax rate — would add up to the rate voters agreed to. McEathron said a levy rate of $2.15 per $1,000 would “break even.”
Snell added that the board still needs to consider key pieces of information before setting the levy rate by the end of November, including enrollment counts in October and assessed property values in November.
“The revenue from the local levy is really important, as we’ve used the levy to enhance our programs,” Snell told the Post-Record. “Each year you certify the levy rate and normally there’s not much fanfare, but because of the state changing the limit, we’re trying to be thoughtful about that process (this year).”
Of the $97.7 million in revenues coming into the district’s general fund — the fund that pays for operating expenses — the local levy is the one area district leaders can somewhat control, McEathron said. State funding accounts for 83 percent of the district’s total general fund revenues. Federal funds account for 3 percent of the general fund revenues and local revenues make up 5 percent of the dollars flowing into the district’s general fund. In 2019-20, the local enrichment levy accounts for 9 percent of general fund revenues.
“It’s the only variable we can really influence,” McEathron said of the local levy rate.
If the board approves a levy rate higher than $1.50 per $1,000, it can only go up to $2.50 per $1,000 per state law. A $2.15 levy rate would add $2.13 million to the 2019-20 general fund and another $1.92 million to the 2020-21 general fund. A $2.25 levy rate bumps those numbers up to $2.46 million in 2019-20 and $2.2 million in 2020-21, while a $2.50 levy adds $3.27 million in 2019-20 and $2.95 million in 2020-21.
McEathron said the cons of increasing the levy rate include an increasing tax burden on citizens and the fact that the state schools tax also increases in 2020 (although taxpayers will see a tax decrease in 2021). Benefits of increasing the levy rate, he said Monday, include “preserving programming for students,” helping two fiscal year budgets, cutting the district’s reliance on using fund balances to cover operating expenses and “mitigating risk of future budget cuts.”
To learn more about the proposed 2019-20 Camas School District budget, visit camas.wednet.edu/about-csd/budget-funding/.