NL School Board OKs preliminary budget
By John Faucher
The New London School Board unanimously approved a preliminary 2021-22 budget of $33.3 million dollars at its Sept. 13 regular board meeting.
The approval followed the district’s annual budget hearing held earlier that same evening.
Business Services Director Joe Marquardt provided a budget breakdown at the hearing.
“Really the first thing, since we’re a public entity, we talk about property taxes and this year’s projection is very good news related to that,” said Marquardt. “This year’s budget projects a 4.5% reduction in the tax levy and a 4% decrease in overall spending.”
Marquardt said the levy reduction is related to additional equalization aid revenue anticipated from the 2021-23 biennium state budget and equalization aid revenue offsets to what is paid by property owners.
Marquardt said the 4% decrease in spending is related to the state’s freeze on revenue limit increases and a reduction in capital projects spending from Parkview and Readfield Elementary projects in the summer of 2020.
State, federal variables
“The freeze in revenue limit per member [student] is an important variable to explain to the community,” Marquardt said.
While the state increased K-12 spending overall, it did not allow districts to increase spending per pupil.
He noted that expenditure increases are for one-time federal revenues, or Elementary and Secondary School Emergency Relief Funding (ESSER) items.
“Those expenditures do not increase the levy. That was federal dollars given to states to give to their school districts based upon demographics,” Marquardt said.
“This is the largest federal funding increase that I’ve seen since the late 2000s when American Recovery Reinvestment Act funding (ARRA) was available for districts to use,” said Marquardt.
Marquardt reminded the board those are one-time funds that are helpful to balance the district’s budget; however, he cautioned that unless state increases are part of future budgets, the district’s sustainability will be challenged.
“Last time we saw those funds, a few years later is when we saw the decreases again in the state’s budget to withstand shortfalls,” said Marquardt.
Mill rate reduction
Marquardt reported that within the 2021-22 budget the mill rate, or tax rate is projected to decrease by 12%. He credited significant property valuation growth, and noted the board’s decision to levy an additional $146,000 in 2021-22 because the district qualified as a low revenue limit district and equalization aid increases to the state budget.
Revenue assumptions for New London include a $641,990 estimated increase in state aid, a 4.5% decrease in property tax levy and an 8.5% increase in property valuation.
“Valuation changes impact the mill rate, but do not provide more revenue to the district. If the property valuation goes up, the mill rate goes down,” Marquardt said.
The preliminary budget reflects a 13.7% decrease in the mill rate from 7.95 to 6.91 per thousand of taxable property value.
“The mill rate will be the lowest I have on record since the early 1980s,” Marquardt wrote in an executive summary of the budget.
He also reminded board members that the numbers are projections as of late-August and final levy and spending totals can change up until levy certification on Oct. 25.
Other budget assumptions
The proposed budget assumes a Fund 38 levy decrease of $850,000 due to smaller debt payment for Parkview and Readfield Elementary projects.
The budget also reflects an anticipated one-time revenue of $87,815 from the sale of surplus property at Readfield.
Expenditure assumptions
Expenditure assumptions within the budget include a 7% increase in health and dental insurance plans; an increase of one FTE (full-time equivalent) certified staff and 1.75 increase of FTE support staff.
The budget factored in a 1.23% increase in wages, an additional $75,000 for supplemental compensation.
The budget also assumes a membership reduction of 68 FTE students due to smaller incoming class sizes and a net loss of 117 FTE students open enrollment.
Marquardt noted that many of the students who enrolled out of the district never have attended schools in the district. The net expenditure of payments to other districts for open enrollments is $986,769.
Marquardt informed board members that the total private school voucher impacts will not be known until October. That number he said typically is around one percent of the total levy.
ESSER funding revenues
The district has budgeted $200,000 of federal Elementary and Secondary Emergency Relief II related expenditures out of the $811,000 available to New London, and has not spent any of its remaining $1.9 million in ESSER III funds.
Marquardt said further discussion of ESSER funds will evolve as necessary. The district has two fiscal years to expend the funds.