School board informs public of future financial woes Opt-out will be considered at Monday meeting by David Lias Vermillion School Board President Tom Craig wouldn't reveal what may be the final outcome of the board's upcoming regular meeting Monday.
It became apparent to the 20 people who attended a special board meeting in the Vermillion High School library, however, that a property tax freeze opt-out will need to be approved by the board and affirmed by a vote of the public for the district to remain financially viable in the next five years.
The school district is projecting that without an opt-out, it will begin swimming in red ink in 2004-05 to the tune of approximately $900,000.
The negative balance would continue each year after that. By 2007-08, the school district would be facing a $4.5 million deficit. That total is more than half of district's entire budget.
"At the next school board meeting, we will decide as to whether we will opt-out or not," Craig said. "At the same time we decide the amount of the opt-out, and for how many years that we will opt-out."
The school board had projected it would have $6.4 million in revenue for the current year, and budgeted just under that amount, Craig said. "We actually received $6,438,000, so that gives us a plus of almost $39,000 in revenue over what we had budgeted."
The district's expenditures for this year are expected to total about $6.6 million, which is $132,000 less than originally expected.
"That's almost a 2 percent reduction in expenditures," Craig said.
The district will end this year with a fund balance of $805,000, which is $250,000 better than originally expected. The district could also rely on contingency funds to help meet some future expenses.
"That still doesn't eliminate the fact that we're spending more money than we're taking in in revenue," Craig said. "Unless the state makes some significant change in the money they send us, that will continue to be the case. That's why we're talking about the opt-out. That's the only way we can increase revenue."
Should the board decide to opt-out of the tax freeze Monday, its decision would be referred by the board to a public vote in September, Craig said.
A successful opt-out would insure the continuation of many of the district's current education programs � for a few years.
Should the board and public approve a five-year, $500,000 opt-out, the district is projected to begin experiencing growing fund balance deficits starting with the 2004-05 school year. "We probably could make $500,000 over five years work, and not cut any more programs or effect our education," Craig said. "The one shortfall that amount of money has (is that) we'll make it through that five years, but at that point we won't have any fund balance. Then we're going to be going back to the voters again, except we'll be in worse shape than we are now."
A $600,000 opt-out over five years would enable the district
to avoid a deficit until 2005-06. Board member Michael Granaas admitted that he doesn't question whether the district should or shouldn't opt-out. Rather, he struggles with deciding for how much the opt-out should total.
"I'd hate to approve a $500,000 opt-out and then have people come up to me afterwards and say they would have supported a $600,000 opt-out to maintain some programs," he said.
Monday's school board meeting will begin at 7 p.m. in the high school library.