Valuation hikes help cover state aid cuts

McCOOK, Neb. — Cuts to the budget, long-term saving in the reserves and a boost from property tax valuations is keeping the tax levy for the McCook School District virtually the same as last year’s.

The McCook School Board will be asked to approve, at Monday’s regular meeting, a property tax levy of $1.043239381 per $100 in valuation, a slight decrease from the 2016 levy at $1.043244265.

The $453,960 drop in state aid will be offset by $459,000 in new property tax revenue, according to Rick Haney, McCook Schools business manager.

Still, the district will be operating this year on “deficit spending,” Haney said, with the same resources as last year but with about a 2 percent increase in spending due to salaries and costs of supplies/utilities.

The McCook School District’s property tax request for this year is $7,811,657, up from last year’s property tax request at $7,352,558, a difference of $459,099.

Total 2017-18 budget for McCook Schools is $23,169,476., up slightly from 2016 at $23,090,906.

The 2017-18 budget includes $6,100,261 for the general fund ($5,360,030 in 2016), with 85 percent of that going to salaries, Haney said.

The budget also includes $1,242,422 in the depreciation fund, that the school board has made a priority to build up through the years, Haney said, and used for upgrades in the district. Several roofing projects may be scheduled this year for some of the district’s buildings, he said.

Other budgeted funds are employee benefit, $139,328; bond (for the 2006 renovation of McCook Elementary), $707,466; activities (sports/clubs), $214,707; school nutrition (school lunch program), $47,488; special building fund, $150,779; and student fee account, $50,000. Student fee account is mandated by state law to fund activity fees/supplies for low-income students; Haney said the community supplies those needs and the fund is rarely, if ever, accessed.

State aid has been declining the past few years and is something the district has been anticipating, he said, to avoid what happened about 15 years ago when a severe reduction in state aid found the district with little reserves. At that time, the district was forced to cut nine programs, Haney said, something neither he nor the school board want to repeat.

Because of that, the district, since then, has gradually been building up reserves and will dip into that fund this year when needed,  Haney said. The reserve currently stands a little under $5 million, the amount it takes to operate the school district for about three months.

Haney said the district, with input from school board members, took several strategies this year with the goal of keeping tax levy the same as last year’s. These included not filling some para professional positions and changing some business partnerships.

In addition, building budgets were decreased by 10 percent, garnering the district $40,000, the activities fund was cut by 10 percent, adding another $5,000 to the budget, and the district “will continue to look for ways to cut spending,” Haney said, with the least amount of negative impact.

State aid is adjusted on an annual basis to fit the state budget, said Superintendent Grant Norgaard, with amounts calculated to schools based on such things as student enrollment, students with English as a second language, poverty rates and how much property taxes can contribute.

A small school in a large district, with ample property tax revenue, can rely solely on local sources (property taxes) and not get state aid, whereas a larger school in a smaller district may receive state aid, depending on property tax revenue, student poverty rate and enrollment, etc.

Despite being one of the larger schools in Southwest Nebraska, its district is smaller than neighboring school districts, Norgaard said, which is why state aid is received.  Instead of relying so heavily on local property taxes, the ultimate solution is for the state legislature to find a state aid formula that is more equitable, he said.

Haney said the administration and the school board had anticipated a deficit year, so although “It’s not what we like, we’re prepared for it,” he said.

Monday’s meeting begins at 6:30 p.m. at the McCook Junior High conference room, with a budget hearing for support or criticism of the budget, followed by a public hearing for the 2017-2018 tax request of $7,811,657. The regular meeting will start after that.