As the Breckenridge Independent School District prepares to finalize its budget for the upcoming school year, the district has found itself in a better financial position than in the past few years. This year is what BISD Superintendent Tim Seymore refers to as a catch up year.
He said that because of increased tax values this year as a result of slightly higher oil prices, combined with the way the state does school financing, BISD has a windfall in revenue.
During last week’s school board meeting, Seymore laid out his recommendations for how the district should use those extra funds to pay for capital improvement projects the district has put on hold for several years. He also said some of the funds will be returned to taxpayers in the form of a tax cut.
According to Seymore, two factors are contributing to the increased revenue. First, he said, tax values for the district are up about seven percent over last year because of a slight increase in oil prices. Secondly, he said, the amount of money the state contributes to the district will be based on last year’s tax collections, which were low because of last year’s depressed oil prices, so they will kick in more. That means there will be more tax revenue collected locally, and the amount the money the state kicks in will be higher.
Using a simplified example of how the school finance system worked, Seymore said the district calculates how much money they are going to have to operate on, based on how many students the district has enrolled.
“Let’s just pick a number, let’s say $10 million,” he said. “That money comes from our local taxes and what the state kicks in. The state kicks in their amount based on last year’s tax collection. If we collected $5 million last year and were supposed to get a total of $10 million, the state would kick in $5 million to get the $10 million.”
He said that works to the advantage of the district if tax values increase over the previous year, like they did this year. Using the $10 million example above, he said if the district collects more than $5 million because of the increased tax values, and the state kicks in the higher amount based on last year’s lower tax collections, the district ends up with a revenue windfall that year.
However, he said it works the opposite way if tax values decrease from the previous year like they have during the past few years. Again, using the $10 million example, when tax values decrease from the previous year, the district collects less than the $5 million in tax revenue, but the state still only kicks in the $5 million because it is based on the tax collections from the previous year. So the district ends up with a shortfall and doesn’t get fully funded for full $10 million, which has been the case the past few years.
Seymore said it’s important to understand that the increase is only for the one year, which is why the he wants to use the money for capital improvements that can be completed immediately and not for things like hiring additional employees. He said additional hiring would require the positions be funded in the future and values could drop again, causing the extra money to not be available to fund those added positions.
One item on Seymore’s list that was approved by the board during last Monday’s board meeting was increasing the amount paid by the district to the employee insurance supplement from $500 per year to $1,000 per year. He said that because the supplements are not part of each employee’s salary, the costs are not locked in past this year.
Also included in the list of capital projects Seymore would like to use the funding for are:
· Purchasing new school buses. Seymore said they haven’t purchased buses in a long time and would like to purchase two or three school buses, depending on whether the school board chooses to purchase new buses or slightly used, out-of-lease buses. He said the current buses are safe, but some of them require a lot of maintenance and effort to keep them on the road.
· Repairs to the high-school auditorium. This includes installing new carpet, new curtains and some work to the stage. He said the carpet and curtains are in bad shape and need to be replaced.
· Improvements to the Ag Farm. He said they need to finish out the pens that were started last year.
· Restroom repairs. He said this would include replacing the wooden stalls. Seymore said most of the stall replacement work can be done by district employees using prefabricated stalls that can be ordered.
· Upgrading the intercom system in the schools. According to Seymore, all the current systems were installed in the 1960s and are not very functional anymore. He said the one in the high school is so old that it still has a turntable to play records.
· Purchase cafeteria equipment. He said this would include purchasing a couple of freezers they need.
· New classroom furniture. Seymore said some of the desks used in the schools are 40 years old. He said he would like to purchase new desks, chairs and tables that are more modular that have different kinds of seating arrangements that can be used.
· Refurbish the school board meeting room at the district office. He said they would like to upgrade it to a more multi-use room that can be used for other activities like teacher training. He said it would include doing away with the current semi-circle table that board members sit at, which takes up a big part of the room.
· Purchase maintenance and custodian equipment. For example, Seymore said the district needs several items like floor cleaners that haven’t been replaced in years and a shredder for lawn maintenance.
· Parking lot improvements. He said all the parking lots except for East Elementary, which was recently repaired, need to be patched and seal-coated and repainted. He said right now all the parking lots are still repairable with sealing and patching. The proposed repairs would not include repaving the parking lots.
· High school facade repair. He said the facade in front of the school is in poor shape and needs repairs.
· Pay insurance claim deductibles. He said they are currently working to settle an insurance claim on a hail damage claim and once the claim is settled they will need to pay for the deductible.
Proposed Tax Cut
The tax cut Seymore proposed is a 1-cent decrease on the debt payment portion of the school property tax for 2017-18.
The school tax rate is separated in two parts, maintenance/operations and payment on voter approved debt. He said the maintenance and operation rate will remain at same at. $1.04 per $100 value, but the payment on voter-approved debt will drop by 1 cent per $100 value from $1.1785 per $100 value to $1.1685.
“We have to, by law, set tax a rate high enough to make our debt payment for that year,” Seymore said. “Because values are little higher I can set that rate a little bit lower for ’17-18 and still make my payment. The maintenance and operation rate is $1.04. That’s a given. It’s going to be that way until school finance laws change. The only thing that varies is the debt service payment, which is just set by how the values are.”
A public hearing on the proposed BISD budget and tax rate is scheduled for 6 p.m. Monday, Aug. 28, immediately followed by a school board meeting to approve the tax rate and adopt the budget. Both meetings will be at the BISD School Administration building, 208 N. Miller St.
Story by Tony Pilkington
Cutline: BISD Superintendent Tim Seymore, right, discusses his recommendations for projects to use extra money the district will receive this year. (Photo by Tony Pilkington/Breckenridge Texan)
