Janesville School Board to consider budget shortfall

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Frank Schultz
Monday, September 24, 2012

— The Janesville School District has the money to balance its budget without raising taxes, so the school board could sidestep the fights of previous years over taxes and budget cuts.

The board will consider how to fill its estimated $3.56 million budget gap when it meets Tuesday night.

On the agenda is a discussion about using district reserves—known as the fund balance—to balance the budget.

The board could take action on the budget gap Tuesday, but it could delay action until the end of October.

Some school board members have indicated that the fund balance is the likely budget gap filler. The balance was estimated to be more than $26 million June 30, but it rises and falls throughout the year with the district's cash-flow needs. It has dipped below $10 million on occasion over the past five years.

Board policy dictates that parts of the fund balance be set aside for specific purposes.

The two biggest claimants on that money are a set-aside for cash flow and another set-aside to be used in case the district's self-funded health insurance plan experiences higher-than-expected claims.

District CFO Keith Pennington recently analyzed the policy's effects on the fund balance and found that $3.85 million is not set aside for any other purpose.

Board members had been concerned that they might have to change their policy in order to free enough money to balance the budget, but it appears that won't be the case.

Several school board members have indicated that dipping into the fund balance is the likely budget-balancing scenario, and no board member has suggested anything else, at least so far.

The $3.56 million budget gap is based on the assumption that the board will levy the maximum property tax under the state law that limits school revenues, but that's not as bad as it sounds.

As reported earlier, the maximum tax levy this year is an estimated $1.8 million less than last year's. That's a 5.9 percent decrease. The average school tax bill should go down.

No board member has suggested taxing any less than the max, perhaps because doing so would mean a reduction in state aid and a bigger budget gap.

Also at Tuesday's meeting, the board will receive a preliminary enrollment number from Friday's official headcount. That number affects state aid and taxing capacity.

The higher the enrollment, the better for the budget, unless students arrive in certain schools, at certain grade levels, where class sizes are bumping up against the maximums set by board policy.

If extra teachers and/or aides are needed, that would mean more spending and a bigger budget gap.

"If there's going to be a big deal, that's where the big deal is," Pennington told members of the board's finance committee last week.

The finance committee made no recommendation on fund balance use.

Last updated: 4:34 pm Tuesday, August 27, 2013

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