Although state aid is projected to increase for the Ladysmith School District in the 2020-21 school year, district officials still anticipate receiving less aid due to the state’s complex revenue formula. They point to the formula that bases new school year spending on previous school year actual spending that was reduced due to the coronavirus pandemic.
The Ladysmith School Board received a financial update on the recently-ended 2019-20 school year budget and a preliminary budget preview for the new 2020-21 school year that began July 1.
The preliminary indication is the school district will more than make up for the anticipated $183,000 deficit in the 2019-2020 school year budget, according to Mike Cox, the district’s business director.
“We were able to increase revenues this year as well as decrease expenditures in a number of places,” Cox said in a report to the board.
The budget for the school year recently ended is scheduled for an audit this month with a final presentation to the board on final numbers at its August meeting.
Significant savings occurred in many areas of the 2019-20 school year budget after school buildings were closed in March due to the pandemic. Layoffs that occurred also saved money for the district.
“This worked out for both the district as well as the employees,” Cox told the board. “With the unemployment and the $600 they received from the federal government, most employees made more money than they would have working. The district also continued to pay all the benefits for them.”
District administration has been working on reducing the projected 2020-21 school year budget deficit.
The Wisconsin Department of Public Instruction projects the Ladysmith School District will receive about 4.25 percent more state in state aid in the 2020-21 school year, increasing to an estimated $6.9 million compared with about $6.6 million for the 2019-20 school year.
The projected increase is the result of the state formula that bases new school year spending on what had been budgeted last fall and not on what was actually spent, according to Cox.
Final aid figures won’t be known until October after the state releases final equalized property value data and official school district enrollment is calculated.
“The DPI has to base their estimate on what we reported last fall was going to be the expenditures for the year,” Cox said. “I know the expenses will be less than budgeted, and we will know the exact amount after the audit that is in process now. After the audit the accountants will inform the DPI of our exact revenues and expenses and they will update their estimate at that time.”
DPI sets revenue limits for each school district in the state, capping the amount each can raise every school year through a combination of state aid and local property taxes. Once state aid data becomes available the difference between state aid and revenue limit becomes the local school district tax levy placed on the total property tax bill. A total property tax bill includes taxes levied by multiple taxing jurisdictions including school, municipality, county and technical college.
New School District Administrator Laura Stunkel said new school year budget planning was made more difficult because of unknowns from the virus.
“It is way too early to predict a tax decrease,” Stunkel said. “As you know, nothing is final until October when the state aid is set for all school districts. There are a lot of moving parts from now until then.”
Cox is anticipating the final state aid amount for the Ladysmith School District will be less than the recently released DPI estimate from DPI due to the decreased district spending after the pandemic school closure.
“Because expenditures decreased from the budgeted amount in the 2019-2020 [school year] budget, state aid will actually decrease,” Cox said.
Ladysmith is a 60 percent aided district, which means it gets nearly two-thirds state aid back on the money it spends. So, if spending decreases, so does aid.
“If we under spent the budget by $200,000 state aid will decrease by $120,000,” Cox said. “There are many unknown factors yet in this budget.”
Summer school numbers are projected to be lower and school administrators are concerned about how many students will return this fall.
Last month, Cox projected a shortfall of about $292,339 for the 2020-21 school year. He has since reduced that projections to less that $200,000 and will continue to work on that deficit in the months ahead.