District Budget Update 2013-14

Public hearing on 2013-14 tax rate set for Aug. 29

The Oldham County Board of Education will host a public hearing on tax rates for the 2013-14 school year at 6 p.m. Aug. 29 at the Oldham County Schools Arts Center. Our mission is to ensure the learning of every child — but we can’t do it without you. As a resident of Oldham County, you’re our biggest investor — nearly half our funding comes from your tax dollars. Funding from the state continues to decrease, making local funding more and more important. Now, we need your help. After three years of keeping tax rates the same, we believe it is time to raise the rate.

 

Budget Presentation

If you cannot view the Budget Presentation above, please click here to view the video on YouTube.

 

Oldham County Schools officials confront rising expenses, declining revenues

budgetgraphic1smDeclining revenues and mandatory expense increases have forced Oldham County Schools officials to spend several months analyzing the budget for fiscal year 2013-14, which begins July 1.

Superintendent Will Wells says the decisions were tough to make but necessary to align revenues and expenses.

The district's expenditures go up every year, mostly from increases mandated by the state government. Annual "step" raises and mandatory contributions to employee and retiree health plans equal more than $1 million in increased spending each year.

Unfunded mandates, including Senate Bill 1, "Unbridled Learning," also have to be paid for by the district.

The district has drawn on its contingency fund to offset spending the past three years, but that practice isn't sustainable.

"It's like paying for your mortgage from your savings account," Wells said. "And much like you need those savings in case of an emergency, our district can't continue to rely on those funds."

budgetgraphic2smThe district relies on three revenue streams for funding, with about 49 percent coming from local taxes, 43 percent from the state and the remainder from the federal government.

Oldham County Board of Education members have kept property taxes the same for three years, at 68.9 cents per $100 of assessed value. But during that same period, property valuations in Oldham County have gone down $116 million — which means less revenue.

The main source of state revenue is through SEEK funding, which has been cut the past two years with more cuts expected, Wells said.

"Significant cuts in state funding have also impacted textbooks, ESS, professional development and safe schools — a decrease of more than $800,000 since 2008," he said.

budgetgraphic2smFederal "sequestration" will affect special education and our preschool, although Wells said those figures have not been announced.

The federal government has also ended several job stabilization programs, like the ARRA and Edujobs funds, that were intended to bolster the U.S. economy.

The district received more than $4 million over a three-year period from those funds.

Now, the district must reduce expenditures to balance the budget, Wells said.

"We've worked hard to find ways to tighten our belts that would have the least possible impact on the teaching and learning that happens in our classrooms," he said. "Protecting the classroom from cuts was our number one priority."

Wells has discussed this with board of education members, who will vote on the budget in May.

Board members have been involved in several budget workshop sessions this spring.

The proposed budget includes more than $3 million in cuts in ways Wells says minimizes the impact on students and teachers as much as possible.

Wells said officials did find ways to maintain funding for key areas like Reading Recovery, the Reading Academy and literacy coaches.

"Each of these initiatives is a force multiplier in that they build the capacity of our professional staff and are an investment that directly provides training to teachers who then share their learning with others — their colleagues and their students," he said. "Our students benefit directly and indirectly from these investments."

As a district, more than 80 percent of general fund resources are spent on personnel, including salaries and benefits.

Wells said it is easy to justify that expense.

"Our staff are the reason we've maintained academic excellence for so many years," he said.

However, some personnel reductions are unavoidable.

All-year round employees, as well as others who work extended days, will have a non-paid furlough day on July 5.

That includes the superintendent, central office, maintenance and transportation staff, as well as principals, assistant principals, counselors and librarians.

Schools will still be open on July 5, however, with office managers, plant managers and custodians working regular schedules.

Other reductions at the central office will save more than $140,000.

Staff will also be reduced in areas like maintenance, grounds and transportation, as well as at the Arvin Center, the arts center and Buckner Alternative High School.

Staff affected will be notified by May 15.

Significant changes are also coming to transportation. The district has struggled to fill bus driver positions, sometimes leading to delayed busses and other headaches for students, parents and staff.

Many of those issues will be resolved by reductions in the number of bus routes and number of stops.  Fewer drivers and bus routes means many students will have longer bus rides and longer walks to and from their bus stop.

Wells said despite these cost-saving efforts, the district still couldn't reduce spending as much as necessary without slightly increasing the student-teacher ratio somewhat.

In 2009, the ratio was increased to 23-to-1 from 22-to-1 to balance the budget. The ratio was brought back to 22-to-1 the following year.

Next year, Wells said the student-teacher ratio will be increased for all schools but at varying levels.

Elementary schools will be increased to 22.2-to-1, middle schools 22.65-to-1 and 22.9-to-1 at high schools. This is a reduction of about 14 teaching positions district-wide.

Wells said the district is not alone in facing financial challenges.

"Christian County is cutting $3 million and we're already seeing news that Shelby, Barren and Campbell counties are cutting a million each," he said. "Greater Clark Schools in Indiana has offered buyouts to 29 staff members as a way to save $5 million."

Wells said the district's mission and vision don't change just because resources are a little more scarce.

"We must stay focused on our students and make sure every move we make is in their best interest," he said.

The proposed budget still leaves the district with about a $2 million deficit, Wells said. The dwindling contingency could support spending next year, but the district could face significant changes after that.

Board members will set the tax rate, which has remained steady for three years, in August. Oldham County Schools currently has the 33rd-highest rate in the state, with Jefferson, Shelby and Greenup counties taxing at higher rates.

If revenues don't increase, the district will be forced to cut programs and further increase the student-teacher ratios, Wells said.

 

District again ranked one of state’s top “bangs for your buck” 

budgetgraphic2smOldham County has a rich tradition of excellence in education and this year is proving to be no exception. We have all the members of our community to thank for our continued success.

Every member of our community plays an important role in the education process — and it is our goal that each of our students becomes an important, contributing member of the community.

It's a vital cycle — investing in our students ensures a vibrant, thriving Oldham County in the future.

In addition to developing the next generation of Oldham County residents — and we certainly hope our students choose to live here as adults — our school district is a smart investment in everyone's future.

Homes in highly-regarded school districts command a premium when being sold — as much as 11 percent, according to a 2010 study published by the Federal Reserve Bank of St. Louis Review. The study found that homes in a district with test scores 5 percent higher than average sold for $16,000 more.

And while we've been in a buyer's market for several years, houses in good school districts tend to hold their value better overall, according to a Wall Street Journal article. For instance, in Irvine, Calif., average price per square foot fell 18 percent from 2006 to 2010 — but the larger metropolitan district surrounding Irvine saw prices fall 33 percent. Similarly, prices in the high-achieving Andover, Mass., district fell 4 percent, compared to more than 16 percent in Boston metro.

It is the same in Bellevue, Wash., a Seattle suburb with some of the state's best schools. A broker told the Wall Street Journal he doesn't think there's ever been a school levy on the ballot that's been turned down.

"Even residents who don't have school-age children tend to stand behind the schools," wrote article author Sarah Max. "It's not altruism; it's economics. All things being equal, homes in the Bellevue school district fetch as much as a 15 percent premium to those just outside of it."

We also pride ourselves on being good stewards of your money.

The Bluegrass Institute, a free-market think tank based in Bowling Green, produced its second-annual "Bang for the Buck" report in 2012.

The report evaluates the efficiency of Kentucky's schools by comparing each district's test scores (on the ACT) to their per pupil spending, producing a score-spending index ranking.

According to the report, Oldham County is the fifth most efficient district in the state — and the largest district by far in the top 10. The four schools with higher efficiency scores have between 600 and 2,400 students. 

The index ranking used our district's 2011 average ACT score and our total expenses per pupil in 2011. 

Our high levels of student achievement have been attained even though we are near the bottom in state operating revenues available annually to the district — about 18.5 percent less than the average district in Kentucky.

Our tax rate of 68.9 cents per $100 of real estate ranks 33rd in the state — Jefferson County Public Schools is now at 70 cents.

We remain fully committed to the education of every student in our district and maintaining the high standards we've established — but we know there are tough times ahead.

From 2008-2011, we cut $4.2 million from the budget. Now, we're proposing another $3 million in cuts. And based on revised enrollment projections, we're closing one elementary school and delaying the construction of another. 

The implementation of the state's Senate Bill 1, which brought the most sweeping reforms to Kentucky education since KERA, also brought with it a variety of increased expenses — all mandated by the state, but unfunded.

We're already seeing other districts make significant cuts — Greater Clark Schools, in Indiana, hopes to make $3 million in reductions to its general fund, including buyout packages to 29 educators and staff. Campbell County's board of education will reduce staff by 28 employees as part of $1 million in cuts — mostly because federal stimulus money has run out.

The pinch is being felt in Oldham County as well — those federal funds brought us more than $1 million per year for three years but ended last fiscal year.

As we balance decreasing revenues with increased expenses, know that we are searching for every expense we can eliminate without impacting instruction. 

Our school district is an integral part of our community — a community that stands behind and takes pride in its schools. As residents of Oldham County, we benefit from having a school system recognized throughout the state, and arguably the nation, as being exceptional. 

We take pride in our tradition of excellence and are committed to achieving our goal of providing a world-class education to our students and preparing them to be competitive in the 21st century global workforce.

Take pride in our schools and thank you for your continued support — our students thank you, too!

 

Budget FAQ 

We've compiled some common questions about the budget. Still have a question? Let us know! 

  • How is the district funded?

Our general account is funded about 49 percent from local property taxes and about 43 percent from the state.

The state has cut our SEEK funding the past two years and now funds the district at the same rate it did in 2008. The state has also cut funding for textbook, ESS, professionals development and safe schools.

On a local level, property tax rates have remained steady for three years while property valuations have declined, resulting in less local revenue.

Federal funding makes up the remainder. Sequestration will impact preschool and special education. And the cessation of two job stabilization programs at the end of last school year reduces funding for teacher salaries.

  • Why do expenses keep going up?

Our expenses increase every year, including through salary and benefit contributions required by the state. Other mandates, like Senate Bill 1 "Unbridled Learning," increase expenses through necessary training and implementation.

  • Why does the district have a deficit budget?

Our district's expenses continue to increase in ways we often can't control, while our revenues are decreasing. Lower property valuations and less state funding have significantly impacted our revenues.

  • How is the district being fiscally responsible?

We pride ourselves on being good stewards of the public's money. The Bluegrass Institute, a free-market think tank based in Bowling Green, produced its second-annual "Bang for the Buck" report in 2012. The Center for American Progress also gave us high marks in a similar study.

For three years, we've drawn on our contingency fund to provide sufficient revenues. It's like paying for a mortgage from your savings account. And much like you need those savings in case of an emergency, our district can't continue to rely on those funds.

Our proposed budget for next year is a big step forward in balancing the district's finances and ensuring the fiscal health of the district.

  • How is the district balancing the budget?

We intentionally and thoughtfully looked for ways to cut expenses while protecting our classrooms as much as possible. Ensuring the learning of every child remains our top priority.

Our proposed budget includes $3 million in cuts across all parts of the district. Because more than 80 percent of our general fund spending goes toward salaries and benefits, it was impossible to net enough savings without cuts to personnel.

Here's a list of some reductions we're proposing:

  • Non-paid furlough day July 5 for all year-round and extended day staff
  • Other central office reductions to save $140,000
  • Staff reductions in other areas, including maintenance, grounds and transportation; Buckner Alternative, the Arvin Center and the Arts Center
  • Transportation changes to save $600,000
  • Slight adjustments to student-teacher ratio funding, currently at 22-to-1 — elementary will be 22.2-to-1, middle school 22.65-to-1 and high school 22.9-to-1.

How is transportation changing?

We are reducing the number of routes and the number of stops that our buses will make.

Students in many neighborhoods will need to walk to a communal stop instead of the bus stopping at every driveway. These stops will be designated in areas that are safe for students to both walk to and from and also safe places for them to congregate. Transportation staff members are being very mindful of areas that are hazardous for walking or congregating and will only make changes where it is safe to do so.

Some bus routes will become longer as we consolidate routes. Some routes will see very little changes.

We do anticipate slightly altering the starting and ending times of school to accommodate these route changes. These times are not definite yet but are likely to be 5 minutes earlier for elementary schools and 15 minutes later for middle and high schools.

  • How will changes to the student-teacher ratio affect my child?

The student-teacher ratio is the figured the district uses to determine funding for teachers at each school. Currently, all schools are funded at 22 students per teacher. In 2008, the district changed that ratio to 23-to-1 to save costs, but officials were able to restore that ratio the following year

We are making slight increases to the ratios at varying levels. Elementary schools, where studies show class size is most important, will raise two-tenths to 22.2-to-1. Middle schools will be funded at 22.65 students per teacher and high schools at 22.9 students per teacher.

Keep in mind that this funding is allocated not just to core content classroom teachers but also includes related arts and elective teachers, which is why the figure is not truly reflective of class size.

While the district uses the ratios to determine the amount of funding each school receives, it is up to the SBDM council at each school to decide how those funds are allocated and how many teachers are actually employed

  • How many people will be cut?

District-wide, we anticipate about 30 staff members being cut and about 30 teachers, although most of those numbers will be set by SBDM councils. Of the 30 estimated teacher cuts, 14 stem from the increase in student-teacher ratios. The remainder are due to cuts in special funding, including to preschool and exceptional child services. Many of the other staff cuts will occur in the transportation department.

Who sets my property taxes?

A number of entities levy property taxes — there are about 17 different groups who collect property taxes in Oldham County, including fire departments, the health department, the library and cities.

For the school district, the board of education sets the rate each fall, usually in early August or late July. The state department of education gives the board several options to consider and estimates of the amount of revenue those rates would generate. One option is always the "compensating rate," which sets the next year's rate at an amount that will generate the same amount of revenue as the preceding year.

School boards across the state set the tax rate annually. They can choose to keep rates the same, decrease them or increase them so that the revenue generated is increased by 4 percent. Any increase above the 4 percent amount requires a public referendum. Increases of less than 4 percent do not require a referendum but a public forum before the board votes is required. You can also share your opinion with your board member before that meeting.

  • How is my property tax payment determined?

The Oldham County Property Valuation Administrator, a locally-elected official, assesses property value annually. Each home is physically examined every four years. Your property taxes are calculated based on this figure.

Currently, the board of education has set the property tax rate for the school district at 68.9 cents per $100 of property value. That means for a home valued at $100,000, you will pay $689 in property taxes to the school district. The county and other entities also tax your property, but we do not receive those funds.

  • I don't have kids in school, why do I pay taxes to the district?

Every member of our community plays an important role in the education process — and it is our goal that each of our students becomes an important, contributing member of the community.

All revenue generated by local property taxes by the school district stays right here in your school system — 100 percent of it gets invested into the services provided to the students of our county. Oldham County is recognized for many wonderful qualities, foremost among these are our schools. Homeowners who pay property taxes are investing in our schools which, in turn, helps ensure strong property values for Oldham County residents.

It's a vital cycle — investing in our students ensures a vibrant, thriving Oldham County in the future.

In addition to developing the next generation of Oldham County residents — and we certainly hope our students choose to live here as adults — our school district is a smart investment in everyone's future.

Many homeowners cite our school district as the reason they moved to Oldham County. By supporting the continued success of our district through your taxes, you ensure the value of your property in the future.

In addition, strong school districts lead to lower crime rates and better physical health — things we can all get behind.

 

 

 

 

 

Oldham County Schools Logo               6165 W. Highway 146      |     Crestwood, KY  40014    |     Phone: 502-241-3500     |     Main Fax: 502-241-3209