Despite a projected $4.1 million deficit for the current school year and slim prospects of additional revenue, Lindbergh Superintendent Jim Simpson says the school district will not pursue a tax-rate increase for the next 24 months.
During a Board of Education meeting last week, Chief Financial Officer Pat Lanane discussed the impact of the current recession on the school district’s finances, noting that the projected operating-fund deficit of roughly $4.1 million for the current school year is based on revised budget figures and is greater than the nearly $3.3 million deficit anticipated when the board adopted the 2008-2009 budget in June.
Despite the projected deficit, the district will not go into the red, but will dip into its reserves.
“… We can’t operate independently of the economy. Our revenue streams are based on federal funding, state funding and local valuation of property, both commercial and residential real estate. And if all of those are in a free fall, then our revenue is in a free fall,” Simpson told the Call.
“… Talking about everything we’re talking about usually in most times of this and past around the state of Missouri that would mean that school districts start talking about a tax increase …,” the superintendent said. “But we are so understanding that everybody’s in the same boat together, we are in no way wanting to do that at this juncture because it’s the worst of times for everyone. And so the district is going to tighten their belt. They’re going to find ways to cut costs and they’re going to go as far as they can in this in the next two years and then hopefully the economy will rebound and we can talk about things with our community.
“But I wanted our community to know that many districts have talked about a tax-levy increase as the summary statement of all this finance talk we’ve done here. But we know it is not good for our community to have a tax increase at this time so we take that off the table of even discussing that in the next 24 months.”
Though Lindbergh faces financial challenges as a result of the current economic recession, Simpson said the district’s reserves of roughly $26 million are the reason why the situation is not a crisis at this point. But belt-tightening measures will have to be considered to help reduce the projected deficit this year and in future years.
Lindbergh officials also are very cognizant of the financial difficulty residents and businesses currently are experiencing, Simpson said.
“That’s Lindbergh’s tradition. We have a strong, valued tradition in terms of stewardship of our resources and we have a strong partnership with our community and that partnership usually goes along the lines of live in Lindbergh, you’ll pay the lowest property taxes in St. Louis County. And so that is our tradition and we respect that in terms of everyone is feeling the same pain so we will try to hold the line … Up to 24 months we will try to hold the line, tighten our belts and try to still have the same quality of education as we possibly can go.
“It’s a painful thing. I don’t want anybody to think it’s an easy thing … It’s no different than a family. If you’ve got to live on less, there’s some pain there and you downsize, there’s some pain there. But we are totally convinced as an administrative team and I think our board would echo this — I don’t want to speak for them, but I’m sure they would say our community is feeling the recession and they’re concerned about their families’ finances and their business finances and how they’re going to make payroll and how they’re going to come up with the money they need for their mortgages and so forth. And so being there right there with them, we’re just going to tighten our belt and we’ll try to make that our main financial focus for the next two years.”
One proposal district officials are considering placing on a future ballot is a Proposition C rollback waiver.
Proposition C is a 1-cent statewide sales tax dedicated to education funding. Half of the revenue collected is divided among the state’s public school districts and the other half is returned to taxpayers in the form of a property-tax rollback unless district voters have approved a waiver of that rollback.
However, because Lindbergh’s current operational tax rate is the state-required minimum of $2.75 per $100 of assessed valuation, voter approval of the Proposition C rollback waiver would not have any financial impact at this time.
“Now for Lindbergh, it could potentially have a huge meaning because … without our Prop C waiver in our pocket, any tax levy in the future, we would only get a portion of it …,” Simpson said. “We are looking tentatively at some time in ’09 and letting that be our Prop C waiver year. We can put that in the vault and then we’ll have that in place if we ever want to go anywhere with it.”
District officials want to be up front with the public to ensure residents are aware of the district’s financial situation.
“… We have to tell you where we are and the facts of where we are and they can be taken as a negative, make you have a negative reaction, a gloom,” Simpson said. “But we have strong balances. They will take us a distance down the road. Now that distance is 24 to 36 months, unless we get revenue coming from somewhere, at the current expenditure rate … No one should panic. No one should think that the district’s in financial peril. It’s just one of those business of things that we have to do to get ourselves in a balanced way so that our revenue equals our expenditures and we will do that.
“We’re good financial stewards. Our board’s a good, strong board that’s conservative financially and we will find a way to do that. And I think we’ll do that in a way to make our community proud and we’ll be partners in that. Everybody needs to know that we’re down $4 million and it’s the opposite of being up $4 million — everything’s going to go fine and we’re going to get through this recession and we’re going to get to the other side of it stronger and be ready for the next big prosperity decade …”