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For Milton schools, budget, state aid are moving targets

MILTON — Although state estimates show a $1.5 million boost in state aid over last year could help buoy Milton School District’s budget, district officials are cautioning the board not to pin its hopes on the extra cash coming through.

According to a district financial report released this week, the district spent $1.4 million less than it had budgeted in the 2011-12 school year.

That’s mixed news because while it means the district’s costs were less than anticipated, it could mean the district will get less state aid in its coming budget year.

The district last October predicted a $1.6 million deficit, but its costs overruns were only $232,000—about $1.4 million lower than estimates.

In a district memo this week, Director of Business Services Mary Ellen Van Valin called the variance “quite large” and suggested it could mean the state would roll back a portion of the estimated $19 million in equalized state aid the district has coming in its 2012-13 budget.

How much that rollback could be and how big an impact it could have on the district’s bottom line won’t be known until October, when the district’s state aid is certified.

Milton was one of a handful of area school districts projected to get a boost in state aid payouts in the coming year, according to July estimates by the state Department of Public Instruction.

The amount of equalized aid a district gets is based in part on a district’s estimate of its spending in the preceding budget year. Districts are required to report those estimates to the DPI prior to the end of a budget year so that the agency can begin calculating shared costs and state aid estimates for the coming year.

In Milton’s case, it over reported and under spent its estimate in 2011-12 to the tune of $1.3 million.

Milton’s total budget is about $33 million. With a budget that size, it’s normal for accounting forecasts to be off by a small percentage, but a disparity over $1 million is concerning, Van Valin told The Gazette.

“You could swing $300,000 to $400,000 even $500,000 in a year. As a percent of $33 million or $34 million, that’s not a lot. I just don’t like (being off) over a million. Something should be looked at. It’s too much,” Van Valin said.

Van Valin told the board this week that she’s discovered a glitch in the way the district has been reporting a credit it gets for an insurance trust for retired employees.

She indicated that in past budgets, the district has considered the credit a cost, even though it has not spent the credit. It has led to the district missing the mark on estimates it is reporting on insurance spending, a major operational cost for the district.

In 2011-12, the credit was $407,000, according to district estimates.

Val Valin reports that the district’s budget numbers also were thrown off by a $100,000 decrease in utility costs, thanks to a mild winter. The board on Monday is expected to approve a $33 million preliminary budget that shows a projected surplus of $233,000 and a levy decrease of 8.7 percent.

Those projections are largely tied to estimated increases in state aid, which Van Valin now says are “most likely inflated.”

She said anyone banking on getting a nearly 9 percent break in property taxes could be disappointed once the state justifies state aid payouts with the district’s actual budget numbers from last year.

“People might see that $19 million (state equalized aid amount) and go ‘Woo hoo! Our taxes are going down!’ Well, that may not be true,” she said.

“I don’t want to shock people when it comes to certify the levy, but I don’t want to say the sky is falling either,” Van Valin said. “I think it (state aid totals) will be somewhere between what we were certified for last year and what this year’s aid estimate is.”