School Budget 101

Welcome to a brief overview of the Berkshire Local School District’s current budget - basically where the money comes from and where the money goes. These figures are based on our current Five-Year Forecast as reported to the State of Ohio and on file in the Treasurer’s Office.

Where the money comes from:

v       The School District has a current budget of $10,334,000 in revenues for fiscal year 2007. Down $170,000 from fiscal year 2006.

v       The School District has three main revenue sources that account for 85% of the total revenues received for the District. All at the control of forces outside of the District!

¨        General Real Estate Property Taxes account for 38% of the budget. These monies are collected on all real estate within the School District. The School District community votes on the millage collected by the School District and with House Bill 920, reduction factors are applied to the millage to make sure the levies collect only the amount as originally voted on by the community even when the assessed values of the property go up.

¨        Unrestricted Grants-in-Aid or Intergovernmental Revenue account for 34% of the budget. These monies are received from the State of Ohio in the form of School Foundation payments. The amount received is formula driven - depending heavily upon the student population and the assessed valuation of all property within the School District. There are also other calculated amounts added to and subtracted from the payments, (such as transitional guarantees, transportation, special education transportation, open enrollment tuition and deductions, community school deductions, and county educational service center deductions) to determine the final amount received each month.

¨        Income Taxes account for 13% of the budget. These monies are currently collected at a rate of ¾% on all income generated by those persons living within the School District boundaries. This income tax was voted on by the School District community.

v       The remaining 15% of the revenue received by the School District consists of interest received on investments, tuition received from other districts, pay-to-play fees, student fees, rental of buildings, donations and property tax allocations.

¨        Property Tax Allocations include the homestead and rollback deductions you will see on your tax bill that the State “makes up” to the School District and the “make up” for the loss of the tangible personal property tax that is being phased out in fiscal year 2009.

¨        The tangible personal property tax is what the businesses within the School District had to pay each year on the machinery, equipment and inventory on site at their business at the end of the year. In fiscal year 2006 tangible personal property tax accounted for 9% of our budget and in fiscal year 2007 we dropped down to 6%. The State has given us a property tax allocation “make up” but that amount only brings us back to the amount collected in fiscal year 2004.

Where the money goes:

Ø        The School District has a current budget of $10,251,000 in expenditures for fiscal year 2007. Up $62,000 from fiscal year 2006.

Ø        Four expenditure classifications make up 96% of the current budget.

Þ       Personal Services account for 57% of the budget. This includes the salary and wages paid to all of the employees of the School District. Staffing costs were reduced by approximately $200,000 for fiscal year 2007, despite all employees receiving a salary increase.

Þ       Employees’ Retirement and Insurance Benefits account for 19% of the budget. With rising health insurance costs reductions were made during fiscal year 2006 and carried into fiscal year 2007.  Employees will pay a portion of their insurance premium to also help with increasing costs beginning in September 2007 as well as continue to pay the maximum of $600/year for single and $1,200/year for family for out of pocket expenses as they have done in fiscal years 2005/06 and 2006/07.

Þ       Purchased Services account for 17% of the budget. This includes all services the School District pays to outside sources. Tuition to outside districts and special education services mandated for our students continue to increase. Utilities costs have risen also adding to the increase in this part of the budget.

Þ       Materials and Supplies account for 3% of the budget. This includes all teaching materials for classroom activities as well as the supplies used to educate the students within the School District. Building budgets have been kept at the fiscal year 2006 level.

Ø        The remaining 4% of the budget includes capital outlay expenditures for equipment and furniture and intergovernmental expenditures for fees charged by the County Auditor and County Treasurer on the tax settlements.  Example: We are billed over $95,000 a year by the County Treasurer to collect your property taxes.

The School District must operate within the various codes and constraints put upon us by the State and within the budget based on the sources and uses listed above. We must adjust our budget for various factors throughout the year, including the increasing number of partially or unfunded mandates; such as No Child Left Behind, Highly Qualified Teachers, special education requirements, achievement tests, and core curriculum courses.

Our main goal is to provide the best possible education for our students in order to prepare them to be productive citizens once they leave our District. With your help and support we can do this!

If you have questions or concerns about Berkshire Local School District finances, please contact me at be_tramont@lgca.org.

Merry Lou Tramont

Treasurer