Lincoln County Schools

Coffee Talk

April 7, 2010

Program guidelines• Coffee Talk is a moderated forum

of questions and answers.

• All questions will be accepted in written form on the note cards provided.

Program guidelines• This forum will address questions

dealing ONLY state budget impact on Lincoln County Schools.– Issues surrounding specific incidents

or items will be addressed in a separate venue by appointment only.

Program format• All districts will present

information about the state budget impact on local school district finances

• Attendants can ask general questions about the topic presented affecting ALL Lincoln County Schools

• Districts will then break out in individual sessions for presentations and questions and answers affecting your school district

Why are we here?• To make the public aware of the

current financial crisis facing the State of Missouri and ALL Lincoln County schools

• To present facts concerning the issues surrounding budgets and the economy

• To clarify current information and future budget implications

Impact of Budget Crisis

Initial state projections• State information provided in

February– Expect a 2% withholding from ALL

schools

– Elsberry $72,705– Silex $29,071– Troy $437,904– Winfield $126,334

Updated March projections

• State added two more possible options

• Reduce $65 per student• Revert to fiscal year 2006 funding levels for ALL schools

Latest FY 2010 State Withholdings

• Last week the senate voted (HB 2014) to protect hold harmless schools from the latest withholdings

• Hold Harmless is a designation based on a state calculation that guarantees that no school will get less funding on a new formula than they did on the previous formula

• This action means schools who are not Hold Harmless, which includes ALL Lincoln County Schools, will receive bigger state withholdings

WithholdingsElsberry $156,659Silex $59,874Troy $1,258,358Winfield $261,422

Current Reality for Lincoln County Schools

Schools that ARE NOT Hold Harmless spend an average of $8,364 per student.Lincoln County Schools spend…Troy $6,938Elsberry $7,268Winfield $7,464Silex $7,584

Impact of HB 2014• The average school that is NOT

Hold Harmless could lose $92 per student

• The Lincoln County Schools could lose…Troy $205 per studentElsberry $193 per studentWinfield $174 per studentSilex $155 per student

HOLD HARMLESS Schools stand to lose $0 per student

Sources of Revenue

State funding facts• State revenue is based on a

thriving economy – Income and sales taxes

• Fiscal Year 2010 (FY 10)• Net individual income tax = -13.9%• Net sales tax = - 6.6%• Net corporate income tax = - 44.2%

State funding facts• State General Revenue

(FY10) fund is down

Missouri’s Net General Revenue= - 12.7%

State funding facts

• State budget = May 14– All local decisions associated with

state funding may be delayed or anticipated due to this date

State funding facts

All four districts stand to lose a total of $1.59 million in fiscal year revenue

State funding facts• FY 2011 an expected $300-

500 million in revenue shortfall

• FY 2011 – Only $218 million available in stimulus money to fund the shortfall

Major Tax Changes That Impacted Individual Income

TaxChange Foregone

RevenueYear

Increased personal exemption

$155 million 1999

State taxation of pensions

$127 million 2007

Dependent deduction

$68 million 1998

Inheritance tax (federal law)

$160 million Phased out over four years in the

early 2000’s

Sources: Fiscal Note (HB 444), Moody 2001 Report

James R. Moody & Associates

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Major Foregone Sales Tax To GR Due To Exemptions or

EarmarksTax Exemption Foregone

RevenuesYear

Prescription drugs $190.3 million 1980Motor vehicle sales tax

$110 million 2005 to 2009

Food $210.4 million 1997Domestic utilities $192.4 million 1980Manufacturing sales tax

$70 million 1998

Internet sales ???

James R. Moody & Associates

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Funding reality2009-2010

Versus 2010-2011

Local funding facts• All of four districts have spent

down reserves • All four districts will have limited

ability to spend down reserves in the coming years

• All four districts have government required expenditures– Special education, professional

development, Title I, etc

Local funding facts • All four districts have experienced

a plateau or decrease in assessed value growth

• Assessed value directly impacts the amount of local dollars available for schools

• Assessed value (tax base) x tax rate = local dollars available for students

Funding follies• Gambling money

– 1986 – gambling proceeds are funneled to Missouri schools• Gambling proceeds were simply placed

in the State General Revenue• Gambling proceeds replaced original

funding, which was funneled to other state entities

• Proposition A – Proceeds used as part of foundation formula

• No gaming revenues have actually increased school funding

Questions?