Mehlville 2003-2004 budget projects deficit of $6.22 million

By MIKE ANTHONY

Executive Editor

A budget for the 2003-2004 school year that projects more than $6.22 million in deficit spending recently was approved by the Mehlville Board of Education.

The board voted 6-1 last week to approve the fiscal 2003-2004 budget that projects total expenditures of $97,680,935 with anticipated revenue of $91,459,720. Board Vice Pres-ident Matthew Chellis was opposed.

Despite the projected deficit, the district will not go into the red, but will dip into its reserves. Based on an anticipated fiscal 2002-2003 balance of $12,140,676, the district projects a fund balance of $5,919,461 at the end of fiscal 2003-2004 on June 30, 2004.

The projected deficit of $6,221,215 for the coming school year totals $2,578,578 more than the deficit that was an-ticipated in a draft budget presented to the board in late April.

In the draft budget, which was presented to the board April 28, total expenditures of $94,866,584 were anticipated for the 2003-2004 school year with projected revenue of $91,223,947.

For the coming school year, operating expenditures of $80,728,714 are projected with anticipated revenue of $78,166,390 for a shortfall of $2,562,324.

Despite the deficit, the operating fund — a combination of the general fund and the teachers’ fund — the school district will not go into the red, but will dip into its operating fund balance that is projected at $5,449,430. After transferring $350,000 to the capital fund, an operating fund balance of $2,537,106 — 3.14 percent — is projected on June 30, 2004. Under state law, a school district is required to maintain a 3 percent balance in its operating fund or be considered a “distressed” district.

For the past fiscal year, which ended Mon-day, operating expenditures of $76,607,892 were projected with anticipated revenue of $76,273,105, a shortfall of $334,787. The district will not go into the red, but will dip into its actual operating fund balance of $6,134,217. After transferring $350,000 to the capital fund, an operating fund balance of $5,449,430 — 7.11 percent — was projected for fiscal 2002-2003.

Revenue projections included in the adopted budget include the Consumer Price Index tax-rate adjustment, estimated at 2.2 percent.

The CPI tax-rate adjustment, available every two years, allows a board of education to compensate for the loss of buying power because of inflation. The CPI tax-rate adjustment serves as a cap, limiting the amount of revenue a school district can receive from increases in real estate values due to reassessment to the lesser of 5 percent or the CPI. While the CPI adjustment is included in a district’s tax-rate calculation, a school board can vote to roll back the tax rate to exclude the revenue generated by the CPI adjustment.

Chellis, a staunch opponent of the CPI adjustment, also voiced concerns about the projected operating fund balance of 3.14 percent at the June 23 board meeting.