EdVANTAGE Blog

Some observations on the property tax report card data for the proposed school budgets to be considered by voters on May 18…

Spending: Statewide, the proposed average increase in spending is 1.4 percent, down from 2.1 percent a year ago.

Nearly 30 percent of districts propose cutting spending below 2009-10 levels.  Half propose spending increases below 1 percent.

On the spending side, one difference for this year compared to last is that districts must accommodate sharply increasing mandated employer contribution rates for pension systems.  A year ago, pension contribution rates were declining.

The 1.4 percent average increase in overall proposed spending is consistent with what pension costs would drive by themselves, even if districts could freeze all other expenses.

Tax Levy: The average proposed increase in tax levy is 3.2 percent, up from 2.1 percent for 2009-10.

Why is the average tax increase higher even though spending increases are lower?  Because of the threatened reduction in the other major revenue source for school districts — state aid.

For 2009-10, School Aid rose by 1.9 percent outside the Big 5 cities under the state budget enacted prior to the report card deadline.    The Big 5 cities do not conduct budget votes or file property tax report cards.

This year, in contrast, districts do not have an enacted state budget to rely on in their local decision-making.  Our assumption is that most districts assume no more aid than the Governor proposed in his budget, which recommended a 5.1 percent cut in state aid.

Proposed tax levy increases appear to be somewhat lower than what superintendents projected in responding to the survey we conducted with the School Boards Association in February.

Seventy-nine percent of districts proposed tax levy increases below 4 percent, compared to the 64 percent of districts responding to our survey which expected to do so.

Patterns: In some years there have been striking patterns in the data, but not this year.

For example, in 2003 (the last year School Aid was cut), the poorest districts proposed the largest tax increases and smallest spending increases.  In 2007 (the first year of the Foundation formula), the opposite was true – the poorest districts were able to propose the largest spending increases while asking their voters for the smallest tax increases.

This year, low and medium property wealth districts generally propose smaller spending increases, while middle range property wealth districts propose the larger tax increases, on average.

On average, increases in appropriations from fund balances and reductions in undesignated fund balances are greater in poor districts.