Woonsocket School District approves 2018 tax request with no opt-out funds requested

By Chris Selland – Woonsocket School Business Manager

The Woonsocket School Board recently approved the requested tax levy for taxes payable in 2018.
The general fund request was for $1.507 (state set maximum) per $1,000 of ag valuation (state set maximum levy was $1.568 in 2017). No opt-out funds were requested in the general fund for the upcoming tax year. The general fund opt-out request for taxes payable in 2017 was $125,000.00.
The maximum general fund opt-out approval is for $250,000, with the highest amount requested by the district in the past at $175,000. The district has a fund balance reserve at this time due to an increase in enrollment and the corresponding increase in state aid, and also due to the sharing of six faculty members with the Sanborn Central School (band, agriculture, computers/tech coordinator, chorus, guidance counselor, and speech therapist).
The special education levy has been increased from $1.00 per thousand dollars of valuation to the maximum levy of $1.461 due to an increase in special education needs and an additional special education teacher hired this year.
The capital outlay levy is now required by the state to be in total dollar amount requested versus dollars per thousand of valuation. This year’s request was for $600,000. This is up from the 2017 request of $475,000. The reason for this increase is to build funding for an updated heating/cooling system for the gymnasium and elementary buildings which, depending on the design, could run $800,000 or more, and also to plan for a possible addition to the elementary building.
The Board’s current plan is to complete a rebuilding/refurbishing of the current boiler, which was installed in 1962, for a cost of approximately $40,000 with the contingency that it will remain functional until the capital outlay certificate payments for the new high school building are completed in 2025 (the $300,000.00 Santel zero percent interest loan, also used for the high school project, was paid off in June 2017).
The balance on the capital outlay certificates is currently $605,000. Capital outlay certificates are paid off with a portion of the regular capital outlay levy, and are not funded by any additional taxes/bonds. This will free up funding for the heating/cooling system project. The increase in the capital outlay request of $125,000 will be offset by the reduction of the general fund opt-out amount of $125,000.
Once the general fund balance is in compliance with the new state imposed caps (30 percent), the school will most likely need to transfer some of the capital outlay levy to the general fund, as per the new capital outlay flexibility legislation whereby districts can transfer up to 45 percent of the capital outlay levy for the current year to the general fund to be used for any general fund purpose.
Some points to keep in mind regarding school funding:
• The “new money” introduced by the legislature per the new funding formula in 2016-17 is also subject to enrollment fluctuations. For example, if your school teacher/student ratio assigned by the state is 12:1, and you lose 12 students, your district would lose one target teacher salary (currently $48,645.00) in state aid reduction. Districts had to meet accountabilities that provided for 85 percent of the new money in 2016-17 to be put into teachers’ salaries, yet some of this new money committed to salaries can be lost in future years with a reduction in enrollment. With enrollment fluctuations affecting state-aid, this could impact a district’s ability to maintain the increase in teacher salaries. There were no new teacher salary accountabilities for 2017-18 imposed by the state as there was virtually no increase in state funding to be accountable for.
• State aid enrollment is the enrollment at each district taken on the last Friday of September. The current formula allows for the enrollment from the current year to determine the current year state aid allotment, versus using the prior years enrollment as in past formulas.
• The state has redefined the application of “other local revenue,” defined as: utility taxes (rural electric and telephone), revenue in lieu of taxes, county apportionment, bank franchise and wind farm taxes. Up until now, these taxes were separate from the local funding effort as defined by the state and were additional revenue to school districts. They will be adjusted over a five year period (20 percent each year) until they are treated in the same manner as local property taxes. This will not have much effect on our district (estimated loss of $6,000 at the end of the five years), but will certainly affect many school districts with wind towers, etc.
• The state imposed cap on the general fund is 30 percent for our size district, meaning our lowest monthly fund balance in the 12 month fiscal year must be 30 percent or less of the general fund expenses for that year. The cap is in effect for 2017-18 and any general fund reserve over and above the cap is a dollar-for-dollar reduction in state-aid for the following year. The state is effectively taking the district’s fund balance that is not in compliance with the cap. The lion’s share of property taxes are received in November and May of each fiscal year and it will be more difficult for districts to cash flow between these months with the cap in place. This is where capital outlay flexibility could be utilized.
• The pension fund levy that was imposed (maximum of .30 per $1,000 of valuation) has been discontinued as per legislative action (starting with taxes payable in 2017). The balance of the pension fund will have to be transferred to the general fund within the next several years.
• Our district’s current opt-out authorization of $250,000 expires after taxes payable in 2019 and the Board, prior to that time, will reassess what the needs of the district are. The district has stood behind their promise that opt-out funds would not be utilized unless needed and due to efficiencies, sharing of staff, and increased enrollment, we are able at this time to operate without them. We need to keep in mind that enrollment fluctuations are always a factor that school districts have to be cognizant of and affect a great deal of funding options.
School district funding has become more and more complicated over the past several years and all districts are adjusting to the new funding formula, legislative changes and their consequences. If you have any questions, please contact Superintendent Rod Weber or Business Manager Chris Selland at 796-4431.

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