South Winneshiek School Budget Article – November 2020

School Budget Article November 2020

Something I say quite often is that at South Winneshiek Schools our top priority is to always do what’s in the best interest of our students.  Student achievement is our number one goal.  When the school board makes important decisions regarding education, this must be our guiding light.  This philosophy is the umbrella under which everything else falls.  The item that is most directly under the umbrella is our school budget.  Every year it is a balancing act to ensure we do what’s best for our students within our fiscal means.

The South Winneshiek School Board and Administration use software called Forecast Five to project our budget out five years.  Forecast Five organizes assumptions needed to provide the board with different scenarios.  The process is very fluid because the district is continuously plugging in updated assumptions to project the most accurate budget.  This drives our decision-making concerning our finances.

The district has two major funding streams–the general fund and the special revenue. Each fund has stipulating guidelines as to how those funds can be spent.  The general fund is where staff salaries are paid.  The special revenue houses the management levy fund (early retirement and unemployment); Physical Plant and Equipment Levy or PPEL (purchase and improvement of grounds, building repairs or remodels, technology, and transportation such as buses); and the Capital Project Fund.  School districts establish capital project funds to account for the financial transactions related to acquisition or construction of facilities.  This funding stream was formerly known as the statewide school infrastructure sales and services tax and was also known as the local option sales and services tax for school infrastructure.  It is now called the Secure an Advanced Vision for Education (SAVE).  You may ask, what about the nutrition fund?  Well, it is its own separate entity and is self-funded just like our three-year-old preschool program.

School financial needs are determined by student enrollment and district cost per pupil.  The revenue sources of state aid and property taxes provide for an appropriate balance between the two.  All children are guaranteed a basic financial support level by having all districts tax themselves at $5.40/$1000 valuation (Uniform Levy), and the state provides aid up to the basic support level.  This level is referred to the “Foundation Level,” which is a percentage of the state cost per pupil that determines the amount of revenue a school district will receive from the state.  The Additional Levy is a property tax levy in the amount necessary to fully fund a school district’s combined district cost and required by the school finance formula to be levied each fiscal year.  

The number of students in a district essentially determines the district’s budget.  Another important factor is the Supplemental State Aid (SSA), which is the percentage increase of the state cost per pupil, which yields a per pupil fixed dollar increase in budgets.  This past year the state gave a 2.3 % growth, which is low compared to inflation and really not sufficient to help cost increases.  For more than two decades, the annual rate of SSA growth was set by a non-partisan formula that incorporated various economic factors. The annual rate for those decades was nearly 6.5%.  For the next 15 years, after growth was no longer set by a neutral formula but decided through the legislature, the annual rate dipped to 3.2%.  Since 2011, school districts in Iowa have managed to educate more than a half-million students each year with an average increase in state aid of just 1.7%.  

South Winneshiek is always looking to “right size” our district based on our enrollment.  This drives our decision making when determining: staffing needs, technology purchases, transportation, and buildings and grounds projects.  Our enrollment over the last five years has been up and down.  In my first year as superintendent in 2016, our certified count was down 35 students from the year before.  In 2017, the district was down 14 students.  In 2018, we were up 5 students from the year past, and in 2019 we went up by 22 students.  This year, we are down 17 students.  This tells me that some of our families in the district are transitory or transient.  This is out of our control, but it is something we need to plan for regularly.  We try to project our enrollment as best as we can; however, there are variables we just cannot account for.

The school board uses the early retirement incentive through the management fund as a tool to help the district’s budget.  This is also a component of right sizing our district based on our needs.  The school district strategically offers early retirement packages to right size the district through attrition instead of making the difficult decision to reduce staff by making cuts. Through attrition we can shape our staffing needs to positively affect our budget while not diminishing the quality of education we provide.

When planning each year for projects, we look at our 1-5-year project list and our 5-10-year project list.  We always have regular buildings and grounds maintenance and recurring costs such as technology and transportation.  It is important we keep our buildings maintained properly, consistently update our technology needs, and keep our transportation fleet running smoothly.  Every year there are things that take priority because of unknown factors, but when it comes to big projects we work very methodically to properly utilize our funding streams to our maximum benefit.

Iowa public school finance is very complicated, even for those of us who work with it on a daily basis.  As we know, education costs money, so it is critical that the school district exercises every tool at its disposal to be as efficient and effective as possible while providing the best education for students.  Transparency is one of our best tools to communicate to patrons our goals and intentions while building trust and support.  If you would like to learn more about public school funding, please visit the Iowa Department of Education website and go to school finance resources or call the South Winneshiek District office.

-Mr. Einck