Prepared Text for Board Meeting –
Marc A. Schare
Tonight, we approve a new five year forecast, an October ritual for school districts across the state. Everyone in this room has heard all the arguments about the usefulness of the projection, why they are important or why they are useless and how much attention should be paid to them.
One thing I think we can agree on is that the forecast represents the best guess at the moment for where things will wind up a year, two years or three years out. Having made our best guess, the next logical question is – are we going where we want to be going and, if not, what can we do about it. We’ll explore these questions a little later but for now, we need to get our collective heads around the notion that the projection is not something that we have to sit idly by and watch – it can be changed through actions taken by the district and it most certainly can be altered by actions taken by the taxpayers.
We can also agree on what
the document says and how it compares to the previously adapted forecast of May
21. In a nutshell, it tells us that the
We can also agree, I hope,
on what the forecast says about the next levy which is, after all, a topic of
some interest to a significant portion of
So much for the sweetness and light portion of the forecast review. After 2 years of flat expenses, our forecast shows expenses increasing at an escalating pace, 6.7% in 2008-2009, 4.9% in FY10, 5.6% in FY11 and 5.9% in FY12. This translates to deficit spending of 3.8 million in FY08 escalating to a one year deficit of 24.3 million in FY12 and will absolutely explode after that. In fact, a back of the napkin calculation shows that a hypothetical 2012 levy assuming neutral state budgets, no increase in appraisal, a continuation of the expense trajectory at 6% and a 7 mill 2009 levy would result in Charlie, Geoff or Julie having to run for reelection while explaining the requirement for around 15-16 mills in 2012. Going back to our three legged stool, the state is doing its part in keeping us even, the taxpayers would be doing their part in passing a 7 mill 2009 levy but the third leg, expenses, is threatening to bring down the stool.
So what is driving the increase in expenses? The primary cost driver seems to be the health care plan that this board approved a month or so ago. We have also changed our assumptions for Purchased Services from a 2% inflationary increase annually to 5% and our assumptions for supplies from 2% annually to 3%. Finally, there is an assumption of new staff members which reflect our slight up tick in enrollment. Note that I am in no way saying that the forecast is wrong, or if Jonathan’s 2% guess is better than Jeff’s 5%. I am only reacting to what the document says.
There is another question
we need to look at. Even if everything in this forecast is reasonable and
Since my role as a board member is not to micromanage the situation, or so I’ve been told, I come here this evening to both cheer the district for its conservatism over the last few years and to sound the alarm. I fear the path we are on, as documented by the forecast, will prove to be unsustainable and while we won’t feel the pinch for a few years yet because the first eye popping levy isn’t until 2012, if we wait 2 or 3 years to alter course, it may be too late.
One final point about this
document. I want to commend our new treasurer for putting together this work in
such a short period of time.