Property tax bills for residents of the Wichita school district likely will go up this year.
The reason, say district officials: Block grant funding from the state is not enough to pay for increases in health care costs, utilities, fuel and other expenses.
Jim Freeman, chief financial officer for the Wichita district, said the budget he’s developing for the 2015-16 school year calls for the district’s mill levy to go up 3.3 mills, an increase of about $39 a year on a house that is valued at $100,000.
The Wichita district will get about $6 million in additional funds for the next school year from block grants, Freeman said. But the majority of those funds – about $5.3 million – are earmarked for teacher pensions. The remaining $700,000 isn’t nearly enough to cover an estimated $14 million increase in operational and instructional costs, he said.
“We’ve got a little bit of a hole to fill here,” Freeman told Wichita school board members during a preliminary budget presentation. “We’re going to have to supply some additional revenue in the form of property tax revenue.”
Last year, the district’s total mill levy went down 3.6 mills, thanks to an increase in state aid aimed at property tax relief.
This year, the district is projecting about 230 more students but no increase in per-pupil funding, because block grant funding is based on current enrollment figures. More concerning, Freeman said, is that the number of poor, bilingual, special-needs and at-risk students in Wichita schools is expected to rise by about 460 students – double the pace of overall enrollment.
“It requires some additional funding to provide the services necessary” for those high-needs students, Freeman said.
School board members are expected to get their first official look at next year’s budget – along with Freeman’s recommendations – in July. The board is required by state law to approve its budget in August.
To help fill the budget gap, Freeman said, all departments have been instructed to cut 10 percent of their nonpersonnel budgets – a savings of about $6.5 million. The district also cut an after-school adult education program, left about 14 job vacancies unfilled and will draw $3.3 million from its contingency reserve fund, he said.
The proposed 3.3-mill increase includes a one-year, one-third-mill special assessment tax that would pay for $800,000 worth of infrastructure around the new Southeast High School near Pawnee and 127th Street East.
School board member Lynn Rogers said last year’s mill levy drop – from 57.2 mills to 53.6 mills – was “an example of the state doing what they were constitutionally responsible for.”
This year’s projected increase means “we’re back to the old habit of the state not pulling their weight, not doing what they said they were going to do,” Rogers said. “And we’re back to having local taxpayers foot that bill.
“It’s not fair. It’s not right. But our tax code in this state is not fair, and it’s not right,” he said. “And it got worse.”
Superintendent John Allison cautioned board members that the budget picture could change, depending on what happened in the waning hours of this year’s legislative session. On Friday, lawmakers agreed to increase the sales tax and to make other tax changes meant to plug the state’s nearly $400 million budget hole. The governor is expected to make another $50 million in budget cuts, although it is not clear what programs will be cut.
“Anything that could change in Topeka, of course, could alter this discussion significantly,” Allison said. “We are hoping that things will get worked out, that we’ll find compromise and that the block grant as presented and promised will be funded.”
State budget director Shawn Sullivan told lawmakers on Thursday that if the Legislature failed to pass a package of tax increases, a 6.2 percent across-the-board spending cut would be needed. If that happens – a move Rogers and other board members called “the worst-case scenario” – the Wichita school district would lose about $22 million.
“We don’t have a plan for dealing with that yet,” Allison said. “It’s not real positive. … You can understand why school districts are dismayed that we’re talking about a 6 percent cut when we’ve worked to align to the block grant formula. This was supposed to be the stable funding for us for the first two years.”