Prepared Notes for Special Meeting

July 10, 2009

Marc A. Schare

614 791-0067

Work - 614 791-1779 Fax

marc9@aol.com

 

The idea behind a spending cap is simple. In exchange for passing a levy, the district agrees to hold the increase in expenditures to a given percentage. This would guarantee to the community that the district lives within the resources that the community has provided for it.

 

The cap can be a hard number such as 3% or it could be a function of the inflation rate + enrollment growth (or decline). The cap can have exclusions for unanticipated situations. Capital improvements would be exempted from the cap and if we receive unrestricted federal dollars, for example, we can exclude those from the cap as well.

 

What would the cap accomplish? By agreeing to artificially limit spending, we are giving the community confidence that levy dollars will last as long as we say they will last and that we wonít go on a spending spree just because we have a large cash balance. We will also be communicating to internal and external audiences our intention to do more with less.

 

The last two operating levy votes have told us that our constituents are concerned with business as usual. The current five year forecast is the very definition of business as usual as it suggests that we would require 3 property tax increases in the next 5 years and that a 7.4 mill levys has the effect of pushing out the first enormous deficit by but a single year. The community is suggesting through their votes and the many correspondences that we have received that something must be done. A spending cap might be the bold stroke people are looking for.

 

Note that while Iím introducing this proposal, I am in no way proposing what that cap might be or how much it should be. Our treasurer and I have kicked around a number of possibilities and community engagement is an option to explain what we are doing and why and soliciting feedback. This proposal is in the formative stageand it is possible that it is too late to entertain this concept for the current levy. In any event,I am not in favor of implementing the spending cap for the 09-10 fiscal year. The earliest it could start in the 2010-2011 fiscal year.

 

If there is interest, the proposal could be researched further. Iíve spoken to members of the Columbus Board of Education and the experiences with their spending cap are decidedly mixed. In New Jersey, Senate Bill 1701 limits school district spending and this has its supporters and detractors. Whatever we do, I strongly believe that we must bring down the run rate as our expenses must be kept in line with our communityís ability to pay, and that getting this done should be a high priority for the district.