CPS faces unknown when it comes to state’s financial allocations
Members of the Columbia Public Schools Finance Committee took about two hours Wednesday night to hear a presentation from Chief Financial Officer Heather McArthur, which exposed some difficulties the district faces when it comes to projecting the next school year’s budget.
McArthur’s presentation focused on fixed costs and one-time needs, including revenue projections that would come in from property taxes and the state of Missouri.
She said that while employee compensation and salaries make up 80 percent of the $230 million budget, those costs are still in union negotiations and will come up in April. For now, the Board of Education will get the Finance Committee’s recommendations for fixed-cost projections.
The committee, which is made up of district employees, board members and Columbia residents, agreed early on in McArthur’s presentation that they would remain conservative in their estimations for the most part.
Part of remaining conservative comes from the guesswork that come with how funding from the state of Missouri will shake out at the end of the legislative session. Committee members discussed how while state legislators tout fully funding the foundation formula, the money they used to fund it comes from other places, like transportation.
CPS receives about $2 million in transportation funding from the state and has to make up the remaining $10 million or so from other revenues.
“It doesn’t really matter for our bottom line if they spent more on the transportation and less on the foundation formula, because it doesn’t affect our bottom line,” said McArthur. “If they take it away from one pot and put it into another pot, it’s still decreasing our overall revenue.”
Historically, the state has kept revenues for transportation around $2 million for the last several years, and that’s how the district is able to project for next year. While they received about $2.3 million for the 2017-18 school year, the committee decided to keep things conservative, going with $2 million.
The committee faced more guesswork when it came to the state adequacy target. Funded by the foundation formula, the SAT is the baseline amount of money given to each district per student. It’s a measure of the average spending per student in schools that meet state standards.
CPS is working on a budgeted $6,241 for SAT in 2018/2019, but the Department of Elementary and Secondary Education is projecting $6,308. DESE is projecting $6,375 for FY 2020. McArthur made clear that that could change.
The committee settled on a projection of $6,250. Board member Jonathan Sessions compared picking the number to throwing darts at a dartboard.
About 30 percent of the district’s funding comes from the state, while local revenues like property taxes sit at around 60 percent of the whole.
New construction has buoyed the district over the last few years, especially as it built new schools.
And despite its tax break, the American Outdoor Brands distribution center will provide a boost to property tax revenue for the district.
“Our assess evaluation globally, and the Columbia area, has continued to rise,” McArthur said. “We’ve always been very fortunate when we go to taxpayers to increase levies and such, that they’ve been very supportive of schools.”
The committee settled on a conservative estimate of a 3 percent increase in assessed valuation, which would come to just under a $70 million increase for the next year.
All these projection recommendations made by the committee will go before the Board of Education on Monday for final approval. McArthur said that those projections can also be adjusted at any time.
Union negotiations should wind down by April, and then the district will take on the compensation piece of the financials, which includes salaries for employees.
“The most important thing I think taxpayers want to see is what the kind of education they’re going to get for their students in the classrooms, and so that starts with our teachers and our teachers’ salaries,” said McArthur. “That’s going to be our biggest driver of our expenditures and our compensation.”
