Anderson School District One Board draft 2021-22 budget

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Anderson School District One Board members were presented the 2021-22 budget during a work session held last week. The Board is considering a tax millage increase of 11.9 mills to make up for a projected deficit in the proposed $85 million budget. Under the proposed budget, projected revenues are $84,554,522. Projected expenses are $85,104,355, resulting in a shortage of approximately $550,000.

Last year, a deficit of $840,629 in the 2020-21 budget of $80.2 million was made up by drawing on the District’s fund balance. Board Chair Nancy Upton said during the work session that she did not want to use money from the fund balance to balance this budget.

Current millage for Anderson School District One is 153.4 mills. The budget proposes an increase to 165.3 mills, which includes the maximum adjustment allowed for CPI and growth. The tax increase will fall primarily on businesses, rental properties and automobiles. Revenue generated from the millage increase will amount to $1,451,645.

According to Finance Director Travis Thomas , the District is expecting a revenue decrease of $286,389 in State EFA Support (base student cost) and a decrease of $20,000 in investment revenue due to low interest rates. Positive changes in revenue include: Ad Valorem (property tax) to increase by $3,032,851; Fee in Lieu of Taxes to increase by $350,000; Employer & Retiree (Fringe) contributions to increase by $479,811 and County Equalization to increase by $300,000. Other revenue adjustments will result in an increase of $1,265,629.
Total change in revenue over last year is expected to be $4,281,193.

(An ad valorem tax is a tax based on the assessed value of an item (millage) such as real estate or personal property. The most common ad valorem taxes are property taxes levied on real estate. The Latin phrase ad valorem means “according to value.” So all ad valorem taxes are based on the assessed value of the item being taxed.)
The adjusted value of a mill in Anderson County is $121,987.

With the millage increase, the projected property/auto tax (Ad Valorem) will bring in total revenue of $19,383,593; Other projected total revenues include: Fee in Lieu $2,050,000; Employer and Retiree contributions $15,254,168; Investments $115,000; County Equalization $3,800,000; and other revenue adjustments $17,051,166.

 

Based on staffing needs, salary increases, retirement and health insurance increases, certification upgrades and other anticipated expenses, expenses are expected to increase by $4,180,000.

Total revenues are projected at $84,554,522. Total expenses are projected at $85,104,355.

Finance Director Travis Thomas said there may be changes with the Senate version of the budget and he expects the base student cost to be increased some.

Other AD1 budget highlights based on State Revenues Sources include:
State Property Tax Relief – Tier 1 (owner occupied homes) $1,720,606; Homestead Exemption – Tier 2 $696,500; Act 388 Reimbursement – tier 3 $7,263,782, an increase of $400,000; Merchants’ Inventory $44,300; Manufacturing Depreciation Reimbursement $415,000 and Motor Carrier and other state taxes $150,000.

Superintendent Robbie Binnicker explained the base student cost funding and the implications of ACT 388.

The EFA Base Student Cost is currently funded at $2,500 per student, based on the 45th day of enrollment in K5-12. AD1 is expecting 9,855 students , combined with the weighted pupil unit, will provide $26,900,594 to the district.
Binnicker pointed out, that according to the EFA formula, the base student cost should be $3,140, or an additional $640 per student. The state has not funded the BSC according to state law for several years. If fully funded, AD1 would receive an additional $6,896,648 in funding.

Binnicker explained that under ACT 388, residential property taxes do not contribute to school operations. The state provides the EFA funding to make up for property tax relief revenues, which are supposed to be covered by a statewide sales tax.
Under the formula used, AD1 receives significantly less money than it would have received if taxes were collected on owner occupied homes.
Binnicker said growing school districts like District One are penalized in both revenues per student and new school start up costs. The funding provides inequities among similar size districts. “The penny sales tax has not matched the previous school property tax revenues,” he said.

Binnicker estimates that AD1 has a loss of revenue of $7,460,655 due to the impact of ACT 388.

 

Based on the operating millage of 153.4, the district would have seen property tax revenues of $16,989,050 (at 4percent). Instead, state funding for District One amounts to $9,528,395.

“Unfortunately, the burden of the increase lies on the business owners, commercial and industrial properties and motor vehicles, which shoulder the greater burden of school operating increases,” Binnicker said.

Binnicker said that if District 1 was funded at the average SC school district amount, it would result in a $30.6 million increase in revenue for AD1. Anderson One is ranked as one of the lowest per pupil expenditure in the state at $8,721. The average per pupil expenditure of 78 school districts in the state is $11,831.

The state average for operating mills is 188, AD1 is currently at 153.4 mills.

(Information on staffing for each school was presented and will be highlighted in a separate story)
District One staffs classes at a 23.5:1 student teacher ratio for elementary schools; 24.5:1 for middle schools, 25:1 core; and 24.5:1 for the three high schools.
Under the budget, the district will increase professional staff by 8.5 and support staff by 3.

Changes in Expense:
Travis Thomas reported Employee Salary will increase $2,800,000; Growth Positions of $750,000; Retirement (one percent increase) mandated $475,000; Health Insurance (.8 percent increase) mandated $35,000; and Certification Upgrades mandated $120,000. Total change in expense amounts to $4,180,000.

Thomas said total projected revenues are increasing at 5.33 percent, projected expenditures are increasing at 6.02 percent.

Anticipated expenses in the new budget are: Salaries $49,698,092; Fringe Benefits $23,998,508; Purchased Services $5,758,111; Supplies and materials $3,888,115; Equipment/Capital purchases $864,154; Transfers and other objects $897,375.

Total expenditures are budgeted at $85,104,355.
Total revenues are budgeted at $84,554,522. The $550,000 difference to be made up by millage increase and base student cost adjustment as explained in this article.
The District One Fund Balance currently is $20,862,134.
A public hearing and final approval of the 2021-22 budget is set for Tuesday, May 25 at 6 p.m.