Lincoln County Schools
Coffee Talk
April 7, 2010
Program guidelines
• Coffee Talk is a moderated forum of questions and answers.
• All questions will be accepted in written form on the note cards provided.
Program guidelines
• This forum will address questions dealing ONLY state budget impact on Lincoln County Schools.– Issues surrounding specific incidents
or items will be addressed in a separate venue by appointment only.
Program format
• All districts will present information about the state budget impact on local school district finances
• Attendants can ask general questions about the topic presented affecting ALL Lincoln County Schools
• Districts will then break out in individual sessions for presentations and questions and answers affecting your school district
Why are we here?
• To make the public aware of the current financial crisis facing the State of Missouri and ALL Lincoln County schools
• To present facts concerning the issues surrounding budgets and the economy
• To clarify current information and future budget implications
Impact of Budget Crisis
Initial state projections
• State information provided in February– Expect a 2% withholding from ALL
schools
– Elsberry $72,705– Silex $29,071– Troy $437,904– Winfield $126,334
Updated March projections
• State added two more possible options
• Reduce $65 per student• Revert to fiscal year 2006 funding levels for ALL schools
Latest FY 2010 State Withholdings
• Last week the senate voted (HB 2014) to protect hold harmless schools from the latest withholdings
• Hold Harmless is a designation based on a state calculation that guarantees that no school will get less funding on a new formula than they did on the previous formula
• This action means schools who are not Hold Harmless, which includes ALL Lincoln County Schools, will receive bigger state withholdings
Withholdings
Elsberry $156,659
Silex $59,874
Troy $1,258,358
Winfield $261,422
Current Reality for Lincoln County Schools
Schools that ARE NOT Hold Harmless spend an average of $8,364 per student.
Lincoln County Schools spend…
Troy $6,938
Elsberry $7,268
Winfield $7,464
Silex $7,584
Impact of HB 2014
• The average school that is NOT Hold Harmless could lose $92 per student
• The Lincoln County Schools could lose…Troy $205 per studentElsberry $193 per studentWinfield $174 per studentSilex $155 per student
HOLD HARMLESS Schools stand to lose $0 per student
Sources of Revenue
State funding facts• State revenue is based on a
thriving economy – Income and sales taxes
• Fiscal Year 2010 (FY 10)• Net individual income tax = -13.9%• Net sales tax = - 6.6%• Net corporate income tax = - 44.2%
State funding facts
• State General Revenue (FY10) fund is down
Missouri’s Net General Revenue=
- 12.7%
State funding facts
• State budget = May 14– All local decisions associated with
state funding may be delayed or anticipated due to this date
State funding facts
All four districts stand to lose
a total of $1.59 million in fiscal year revenue
State funding facts
• FY 2011 an expected $300-500 million in revenue shortfall
• FY 2011 – Only $218 million available in stimulus money to fund the shortfall
Major Tax Changes That Impacted Individual Income
TaxChange Foregone
RevenueYear
Increased personal exemption
$155 million 1999
State taxation of pensions
$127 million 2007
Dependent deduction
$68 million 1998
Inheritance tax (federal law)
$160 million Phased out over four years in the
early 2000’s
Sources: Fiscal Note (HB 444), Moody 2001 Report
James R. Moody & Associates
18
Major Foregone Sales Tax To GR Due To Exemptions or
Earmarks
Tax Exemption Foregone Revenues
Year
Prescription drugs $190.3 million 1980
Motor vehicle sales tax
$110 million 2005 to 2009
Food $210.4 million 1997
Domestic utilities $192.4 million 1980
Manufacturing sales tax
$70 million 1998
Internet sales ???
James R. Moody & Associates
19
Funding reality
2009-2010 Versus
2010-2011
Local funding facts
• All of four districts have spent down reserves
• All four districts will have limited ability to spend down reserves in the coming years
• All four districts have government required expenditures– Special education, professional
development, Title I, etc
Local funding facts
• All four districts have experienced a plateau or decrease in assessed value growth
• Assessed value directly impacts the amount of local dollars available for schools
• Assessed value (tax base) x tax rate = local dollars available for students
Funding follies
• Gambling money– 1986 – gambling proceeds are
funneled to Missouri schools• Gambling proceeds were simply placed
in the State General Revenue• Gambling proceeds replaced original
funding, which was funneled to other state entities
• Proposition A – Proceeds used as part of foundation formula
• No gaming revenues have actually increased school funding
Questions?