A school board general fund budget adjustment of $300,000 will be necessary for the 2012-2013 school year.
That was the prediction of Larry Martini, director of business services during a report to the ISD 831 School Board on Thursday, Jan. 5.
The adjustment does not automatically signal budget cuts, however, as Martini said the district will also look at revenue enhancements for the next school year.
How the district goes about the adjustment is a story for later months. There could be cuts or there could be another draw down from the district’s general fund balance.
The budget picture has been helped by the injection of $50 in per pupil formula aid that will net some $450,000 a year based on weighted pupil units and $450,000 in literacy aid. An additional $650,000 in new special education funding is also in line for 2012-13.
The revenue gains, however, are checked by the net loss of $750,000 in federal funding and an estimated loss of another $750,000 in state aid tied to declining pupil enrollment, now projected at 100 students. Most of the federal aid is tied to American Recovery and Reinvestment Act dollars that flowed to schools over two fiscal years.
The general fund will also see a $500,000 drop in property taxes. The district is also projecting that local fees will decrease by $250,000 in the 2012-13 school year as part of a budget adjustment.
Other potential general fund budget impacts include preliminary estimates of a 1 percent increase in instructional costs and the potential for a 4 percent growth in employee fringe benefit costs.
Another potential negative blip for the budget could come from Washington and the U.S. Congress and Senate which has yet to finalize a long-term payroll tax cut. A two-month extension is in place to start the year, but the district could be faced with again paying the additional 2 percent to the Social Security fund if federal lawmakers can’t agree on a compromise.
The district, along with employees, both save on the 2 percent tax relief program that is in place.
As part of the budget adjustment process, the district will use a participatory program format that gathers input from stakeholders.
As a necessary part of the process, the board also approved a formality on Jan. 5, passing a resolution directing the superintendent and administration to make recommendations for reductions in positions, programs and services, and reasons therefor for 2012-2013.