BG school finances brighter
Written by MARIE THOMAS BAIRD Sentinel Education Editor
Wednesday, 23 October 2013 09:22
With a series of retirements, contract negotiations and a building closure, Bowling Green Schools is better off financially than expected one year ago.
At Tuesday's board of education meeting, district Treasurer Rhonda Melchi gave her annual financial forecast, predicting expenses and revenues for the next five years.
Her new numbers show the district will remain in the black to the tune of $3.8 million through June 2014, but will drop to just $361,358 in June 2016 then go into a deficit of $3.9 million in June 2017.
Last October, Melchi predicted the district would have a $66,489 deficit in June 2014 and $4.7 million at the end of 2014-15.
The better outlook comes from savings from a large number of retirements, a salary freeze, and a reduction in severance payouts and health care premiums paid by the district.
"A lot happens in a year," she stated.
She has estimated income taxes and property taxes will continue to increase by a small margin, combined increasing only $559,000 over the next five years.
Property taxes, which is the major source of revenue in the district and accounts for half of the yearly revenue, will see no significant growth, she said, due to no significant growth expected in new construction.
She predicted $15.4 million will be collected this year.
For the income tax, collection peaked in 2007-08 with $3.4 million coming in, but declined by 13 percent in 2009-10. The next year's collection only increased 1 percent and another 6 percent in 2010-11. Melchi added that last year's collection had rebounded to that collected in 2008-09 but her forecast reflects very little growth in future years.
She expects to collect $2.9 million this year.
She showed revenues increasing only $579,353 from this year to $29,707,456 in 2017-18, compared to expenses at $35,886,764 that year, up $5.3 million from this year.
She estimated state foundation funds will jump this year and next, but she forecasted drops after that.
"Right now the numbers that are out there look promising," she said, but final numbers won't be known until January.
As always, Melchi cautioned that these are just estimates.
The bulk of the increase in expenses comes from salaries plus retirement and insurance benefits. Despite the current salary freeze approved by all staff and administrators, Melchi factored in a 2-percent salary increase beyond this school year. Those numbers should not be taken to imply that such raises will be given, she wrote in her report.
Salaries for this year are down $1.5 million from where they were in June 2011, and down $500,000 from last year due to the high number of retirees last school year being replaced with less experienced personnel or not replaced at all.
Melchi also reported that the district has implemented numerous cuts and reductions in response to voters turning down first the request of a 0.05-percent income tax and then a 6.75-mill property tax request.
"The district will need to evaluate implementation of additional reductions as they will directly affect the quality of education provided to students," she reported.