BELOIT- The West Branch school board Monday night discussed possible levy solutions to an impending operating deficit.
Treasurer Daniel Telzrow presented four options- an emergency levy that generates just enough to eliminate the deficit, an emergency levy that will provide a cushion, a traditional income tax and an alternative-based (earned income) income tax. Board member Earl Trimmer also suggested a permanent improvement levy.
According to Telzrow several line items have affected the financial forecast which will be updated next month, citing the amended state budget which determines unrestricted state aid, multiple retirements and retire/rehires, the decision of forgo bus purchases next year and several reallocations of purchased services. He said the changes to the forecast reflect a cash balance of $288,000 in Fiscal Year 2015, previously projected at a significant deficit, if the district maintains no increases in salaries when the current employee union contracts expire. If the step increases resume at that time, though, the district is projected in a $4.8 million deficit at the end of Fiscal Year 2017.
Telzrow said the board must decide by Aug. 21 if it is going to place a levy on the November ballot. If a levy passes in November, the district will begin collecting in January for an emergency levy and April for an income tax.
Telzrow said he based his projections for a levy or income tax on the $4.8 million deficit projection. If the board decides on an emergency levy (specific dollar amount), it would require an approximate 5.7 to 6 mills to generate $5 million for a $27,000 cash balance in 2017 and 6.8 to 7.2 mills to generate $5.7 million for a $926,000 cash balance in 2017.
A traditional income tax rate of .725 percent would generate between $1.9 million and $2 million annually (equal to 8.5 mills) and bring in significantly less money to start than an emergency levy, Telzrow said, while leaving a $580,000 cash balance in 2017. An alternative-based income tax of 1 percent would generate $1.984 million annually (equal to 8.67 mills) and leave a cash balance of $661,000 in 2017.
Trimmer told the board that a traditional income tax uses the federal adjusted gross income while the alternative-based income tax uses the earned income. He also noted that an income tax is determined by the economy- when the economy goes up, the district gets more money; when the economy is down, the district gets less.
Instead, Trimmer suggested a permanent improvement levy that would designate funds specifically for capital improvement, which he said is easier to understand and see because safety is being increased. He said there are several projects such as the stadium, parking lots and roofs that the public can see need work and which currently would have to be paid for out of the general fund. Currently there are reserve funds for maintenance of the new buildings, as well as $100,000 in the permanent improvement fund from the sale of the Goshen Elementary School.
Schools Superintendent Dr. Scott Weingart expressed the need to wait for the state budget to be approved before moving forward with a levy.
"If we go forward with anything, we have to have the best possible information we can," he said. "One of the worst things you can do is ask for money and then find out you didn't need to."
In other business the board non-renewed all first- and second-year teachers and aides to provide flexibility while determining staffing needs for next year; and accepted the resignation of fifth-grade teacher Necole Carlisle effective the end of the school year.
The next regular board meeting is scheduled for 7:30 p.m. Thursday in the high school Auditorium.
Kevin Howell can be reached at firstname.lastname@example.org