Woonsocket School District navigates funding changes

By Chris Selland and Rod Weber

The 2016-2017 school year is one in which there are major changes in the state funding formula.  In response, the district has developed a plan for transitioning towards the goals set forth by the State.
The funding increase for the Woonsocket District (estimated in September 2016) is $98,731.00. This figure is based on enrollment and a sliding scale student-to-teacher ratio, which ranges from 12:1 to 15:1 based on the size of the school. Most smaller districts have ratios close to 12:1.
One thing to note is that the $98,731.00 increase in funding this year may be increased or decreased in future years, subject to changes in enrollment, which will affect the student-to-teacher ratio.
Other new legislation allows for up to 45 percent of annual capital outlay funding to be transferred into the general fund. The capital outlay fund is a separate local tax levy to pay for buildings, capital assets, textbooks, uniforms and equipment.  The general fund is a school fund made up of a separate local tax levy and state and federal aid that pays for operating expenses to include salaries and benefits, consumable supplies, utilities and insurance.
A stipulation for the increase in funding this year is that 85 percent must go to teacher salaries and benefits. The state has developed a baseline teacher compensation database for each school district to measure from year to year the increase in salaries and benefits.
One thing that has not been taken into consideration is the affect of seasoned teachers, who are higher on the salary scale, retiring and being replaced by first year teachers, and also the range of district health insurance costs, based on whether an employee has single or family insurance. These factors can all affect the fluctuation of teacher salaries/benefits from year to year within a district.
One other new piece of legislation establishes general fund balance caps at 25, 30 or 40 percent of general fund expenses (at the lowest monthly fund balance during the year), based on school district size. The Woonsocket district cap is 30 percent.
The district will lose state aid on a dollar-for-dollar basis for exceeding the fund balance cap beginning with the 2017-2018 school year. In order to effectively manage the changes for these transition years, the district has decreased the general fund opt-out from $175,000.00 to $125,000.00 for taxes payable in 2017. The opt-out maximum available for request is currently $250,000, but the district has never had to utilize the full amount due to increased enrollment. This, in conjunction with the increase in teacher salaries, will help to bring the general fund balance into compliance with the state-imposed caps.
The capital outlay levy will increase by approximately $60,000.00.  The reason for the shift in levies from general fund to capital outlay is twofold. First, the district is anticipating a project to upgrade quite extensively the elementary and gymnasium heating system as the current boiler system is becoming obsolete, with more difficulty maintaining and finding parts for the system.
Number two, as mentioned above, is to work towards compliance with the fund balance caps.  Also, once the general fund balance reserve has been depleted to comply with the caps, we will need to pull dollars from the capital outlay fund (up to 45 percent) to meet general fund expenses. All these changes should be virtually invisible to the local taxpayer, as the general fund amount requested will be reduced and the capital outlay levy increased.
The $250,000.00 general fund opt-out authorization is in effect for three more years, and at that time the School Board will re-evaluate based on the new funding formula and enrollment figures.
Also new this year for taxes payable in 2017, the local pension levy has been eliminated.  The pension levy is a maximum of $.30 per $1,000 of property valuation. The district special education levy remains at $1.00 per $1,000 of property valuation, with a maximum levy of $1.505.
The $300,000 Santel zero interest loan used for the new 7-12 addition project will be paid off in June of 2017, and the capital outlay certificate issue utilized for the balance of the project will be retired in 2025.
Both of these loans are repaid with regular capital outlay levies, with no additional bond levy having been required. The Woonsocket District has increased its average teacher salary from $35,863.00 in 2015-2016 to $40,658.00 in 2016-2017 and the base has increased by $3,100.
We have been fortunate to have experienced a stable, increasing enrollment that has increased the funding allocated for teacher salaries, and most importantly, we will have to make the wisest use of our resources to sustain these salaries and benefits for our teachers, while minimizing the impact to taxpayers.
There is a website established by the state, http://doe.sd.gov/2016EducationPackage.aspx, that has a worksheet with each individual school districts estimated funding allocation under the new formula. It also explains the new legislation effective this year. If you have any questions, please contact Superintendent Rod Weber or Business Manager Chris Selland at 796-4431.

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