Last month the Brown County School Board of Trustees approved a budget that is expected to not result in an increase to property taxpayers.
The budget will not increase property taxes despite the district recently taking out an $8 million loan for upgrades at the high school and a continued decline in student enrollment.
Last school year, 1,663 students in grades kindergarten to 12th attended school in Brown County. The Indiana Department of Education certified the district’s enrollment total for this fall at 1,603 — down exactly 50 to this time last year.
Enrollment totals do not include preschool students because they are not counted at the state level.
Superintendent Emily Tracy said the district leadership was expecting a decline in student enrollment.
“We are still very much wrapped up in a pandemic across the state and nation,” Tracy said.
“It still is very much affecting education in many ways, including enrollment.”
The state pays a school district “tuition support” for each student enrolled. That money goes into the district’s education fund, which pays teachers and staff.
Last year the district received approximately $6,500 per student. The amount the district will receive per student this year is not yet known, according to school corporation treasurer Julia Smith.
Using last year’s tuition support a loss of 50 students equals about $325,000 reduction in the education fund.
Tracy said that although the district anticipates seeing a 4 percent loss in the budget no changes or reduction in programming will occur.
“The previous administration has worked incredibly hard at maintaining healthy and fiscal balances in the funds for the district,” Tracy said.
”Moving forward, it will be crucial for our future success to continue to build out world class opportunities for students and continue to maintain the referendum next year to support our students.”
The school district had been in a mode of cutting budgets due to declining enrollment before Tracy took over as superintendent. Over the last five years more than $4.5 million was cut from the struggling budget.
Tracy said that declining enrollment is not an issue in Brown County only.
“It is a rural mid-America issue. Shifting workforce due to advances in technology, quality of life and place, issues like housing, availability to entertainment and recreation, and a global pandemic all play a role in where families are choosing to raise their families,” she said.
Tracy continued that the entire Brown County Schools team is now working to turn those challenges into world class opportunities for students, which is part of the district’s vision.
“We believe we will find success by ensuring that students develop the foundational academic knowledge leading to credentials with currency; developing lifelong, transferable skills through quality work-based learning experiences, like Eagle Manufacturing; and building strong relationships throughout the entire Brown County Schools experience,” Tracy said.
“We will continue to work with our parents, students and community to create the opportunities that will set all of our students on a path toward lifelong success.”
Bob Harris, the school district’s financial consultant, presented the 2022 budget to the school board at the Oct. 14 meeting.
“You are adamant about a consistent tax rate. Our tax rate is little bit over 68 cents and when this budget for 2022 is worked by the state in December, if the assessed values do not change by the county auditor, your tax rate is going to be 68 cents or lower,” Harris said.
The tax rate will remain consistent even though the school district is set to see an increase in their funding due to an increase in the county’s assessed value.
“Your tax rates will be where they are at now or lower,” Harris said.
The assessed value for 2022 is $1,577,093,559. The assessed value that was submitted for budgets last year was $1,441,800,140, according to Smith.
“The AV came in extremely high. Brown County property values are up, up, up,” Harris said at the Oct. 14 meeting.
Each year the school district submits a five year bus replacement plan. In the plan for 2022 the district budgeted to purchase up to two buses each year for the next five years with estimated replacement costs between $140,000 to $150,000 per bus.
A three year capital projects plan is also submitted each year where a district has to indicate what items they intend to buy that will be more than $10,000, Harris said.
When the budget was put together Harris and Smith were not aware of any specific purchases the corporation intended to make that would be more than $10,000, but the plan includes spending $2,500,000 each on various technology, safety and building equipment from Jan. 1, 2022 to Dec. 31, 2024.
“I wanted to put some amount in the plan so if we have those expenditures come up the appropriation is already approved,” Harris said.
“If any of those large expenditures come up in the next three years we’re covered and have the appropriation in place.”
The total budget for 2022 is estimated to be $27,100,000. That is an increase of $586,470 over this year’s budget.
Part of that increase comes from how much the district’s referendum fund is estimated to bring in next year. For 2021 that estimate was $1.1 million and in 2022 it is $1.2 million.
In 2016, voters approved adding 8 cents per $100 of assessed valuation to the schools’ tax rate for seven years with a penny of that going to the Career Resource Center of Brown County.
“The taxpayers were kind enough to pass a referendum of 8 cents. We promised the taxpayers we would use that referendum money for personnel services, which is salary and benefits, and that is exactly what we spend it on,” Harris said.
“We use that money up every year specifically for personnel services.”
How much that fund brings in each year depends on assessed value.
“We get 8 cents regardless of what happens. If higher AV we get more than $1.2 million,” Harris said.
The rainy day fund budget estimate remained at $1 million for 2022. Like other estimates in the school corporation’s budget, Harris put money in that fund just in case it is needed.
“We have no intention of spending rainy day money next year, however, I put $1 million in the budget because something can come up. If we get it approved a head of time, we have an emergency or need to spend some money the appropriation is in place to do that,” he said.
The school district also pays for bonds and leases out of the debt service fund, which was budgeted for $4.5 million next year. That fund was budgeted at $3,913,530 for this year.
Harris said due to some unknowns at the time the budget was put together, like what the assessed value in the county was or the payment schedule for the new $8 million bond, he and Smith had to estimate higher on that budget.
“Those numbers were high to protect us in case they came in higher. As luck would have it those numbers came in right where we thought they would,” Harris said.
Recently the district borrowed $8 million for two separate HVAC and general maintenance projects at the high school, including renovating parts of the gymnasium.
Harris said despite the new bond, the debt service fund budget for 2022 will be more around $3.7 million and will result in no increase to property taxes.
The operations fund is budgeted at $7 million next year, which is the same as this year’s budget. That fund is used to pay expenses not directly related to students, like transportation and bus expenses, utilities and insurance, and the superintendent’s salary. The operation fund comes from property taxes.
That fund is estimated to bring in $5,069,369 from property taxes. The state caps the operations fund for every school district based on the growth factor, which is a six year average of personal, non-farm income.
For 2022, the max levy is $5,288,976.
Overall, Harris said that this year was a “very good financial year for Brown County Schools” due to budget adjustments that had been made earlier this year.
In the past 10 years, the school district has lost the equivalent of two schools’ worth of students. Further declines are projected as the county’s 65-and-up population increases and the child-rearing-age population decreases.
Due to this decline in enrollment, the Brown County Intermediate School was closed. To keep the number of certified staff in line with the closure, and to avoid firing teachers, retirement incentives were also offered to teachers and non-certified staff like custodians last school year.
In March six certified and 10 non-certified staff members had already decided to take the incentive to retire early.