Revenue growth likely to be restrained
When the fiscal year ends next June 30, the Benton-Carroll-Salem School District will see expenditures have exceeded revenues by about $722,252, according to an updated five-year forecast presented last month to the school board.
Jeff Dornbusch, district treasurer, said he is projecting total revenues to drop by about 1 percent from the last fiscal year to about $18.5 million, while expenditures are expected to reach about $19.2 million, an increase of 3 percent.
Although he is projecting the general fund to end this fiscal year with a cash balance of about $5 million, his forecast includes a deficit in the fund of about $890,000 by the end of the 2011-12 fiscal year.
Personal tangible property taxes, those levied on inventory and equipment, and replacement funds from the state to offset the loss of tax revenues from tangible property as the state phases in a commercial activity tax in its place, are projected to reach $300,000 by June 30 but then drop to less than half that by the 2012-13 fiscal year.
Mr. Dornbusch projects total real estate property taxes to barely climb the next five years, from $7.9 million this fiscal year to $8.2 million by 2012-13.
With the deregulation of the electric industry, however, and the resultant loss of tax revenues for district from the Davis Besse Nuclear Power Station, as well as the state holding its basic aid to B-C-S constant – at about $3.7 million a year over the next five years - revenue growth will be a struggle, he said.
“The state is planning to phase out the amount they reimburse us for the loss of tangible taxes,” Mr. Dornbusch said. “This is a huge challenge that we have to address in the future. People are still going to keep paying the commercial activity tax but by law they’re phasing out by 2011 what they’re going to reimburse schools. That’s a big question mark for all of us.”
He said the real estate market in Ottawa County may also worsen, which would have an impact on the district’s total property valuation, now pegged at $348.2 million.
While revenue growth is expected to remain flat, the projection anticipates expenditures to match inflation rates of 3 or 4 percent.
By 2011-12, expenditures could exceed revenues by about $2.6 million, leaving the district with a projected deficit in its general fund of more than $1 million.
As is the case with other districts, investment income is also projected to drop. The district earned about $481,011 last year in interest, averaging about 5 percent on its bank accounts. This year, the accounts are returning about 2 percent, Mr. Dornbusch said, and investments will probably yield about $130,000 less.
Last year, the district took in about $462,000 through the open enrollment program, in which students from other districts opt to attend B-C-S schools, bringing their per-pupil share of state funding with them. Mr. Dornbusch is projecting that to increase annually to about $543,000 in 2012.
Eighty to ninety students attend B-C-S through open enrollment, he said.
A proposal to construct new restrooms at the high school football field has received preliminary support from the B-C-S school board.
After hearing the proposal from a member of the Oak Harbor High School Athletic Boosters, board members authorized the boosters to work with the administration on a more detailed plan that would include options for the location, size, and the cost.
The project, if approved, would be funded by the boosters.
Beverly Rust, school board president, said the restroom facilities now in use are inadequate for large crowds.