At a meeting Monday night, the Seneca School Board passed the final version of the district’s balanced budget of $3,717,406 in total revenues and expenditures for the 2011-2012 school year.
The new budget includes a total tax levy of $1,814,070. That’s $138,955 below the tax levy limit allowed by state law for the district. However, the ‘underlevy’ is eligible for carryover. This means the almost $140,000 not levied this year will not be taken away from the district’s computed tax levy limit in the future as some under-levied taxes can be at times. The budgeted tax levy is also $4,414 less than last year’s levy.
In passing the levy as it was presented, the board followed the wishes of those at the sparsely attended annual meeting earlier in the month.
Seneca School District Administrator Dave Boland and several board members noted although the property tax levy went down in real terms by more than $4,000. However, the tax levy rate, which translates into the mil rate, went up. This occurred because the general equalized value of property in the district went down by 3.1 percent.
What really hurt the district was that the state didn’t release the information about lower equalized property values until the morning of the annual meeting. Using the previous property values, the district thought the mil rate would essentially stay the same. Now, it must be raised to get the same amount of revenue from property with a lower equalized value.
If property owners do in fact have lower property values, it will lower the amount of taxes they pay, which should offset the higher mil rate. Last year’s mil rate was 12.18 while this year’s will be 12.63.
What does this mean to a Seneca School District resident? Well, the mil rate is the amount paid per $1,000 of assessed value. That means a taxpayer with a property valued at $100,000 would pay $1,263 in school property taxes this year. That’s up $41 from last year. A resident with a property valued at $200,000 would pay $2,526 in school taxes-up $82 from last year. However, the state says equalized property values were down 3.1 percent in the district.
So, if people have property assessed for less than it had been last year, it would serve to reduce their taxes. If equalized values are down 3.1 percent on average, assume a property formerly worth $100,000 is down the average 3.1 percent in value. That means the property is currently valued at 96,900. With district’s increased mil rate of 12.63 on a property worth $96,900 the owner would pay $1,223.87 or $39.13 less than when the property was valued at $100,000.
Last year’s mil rate of 12.18 applied to the $100,000 property would result in a tax of $1,218 or $5.87 less than this year’s taxes with a higher mil rate on the same property of reduced value.
Larry Kelley and several other board members were quick to point out that while the overall value of property in the district decreased, it didn’t mean the value of every property in the district decreased. So, individual property owners would each face a different set of circumstances depending on the assessment of their particular property.
In answer to a question, Boland said most of the declining value occurred in Seneca Township. The municipality saw a large increase in equalized value two years ago that ultimately decreased state aid to the district and set the stage for the large tax increase of 2009.
Board member Shawn Lenzendorf asked his fellow board members to consider spending from the district’s $1.2 million fund balance, as the board had in the previous year, to reduce the impact of the tax levy.
Boland and other board members pointed out that those in attendance at the annual meeting had told the board they preferred to pay for the expenses with a balanced budget of revenue and expenses, rather than spend more of the fund balance.
Lenzendorf said the board could at least spend the $20,000 added to the fund balance from last year’s budget.
Board member Lynn Schreck moved to adopt the balanced budget as proposed. It was seconded by Brenda Ostrander and passed on a roll call vote 5-1. Lenzendorf voted against the motion. Schreck, Ostrander, Reynolds, Kelley and Johnson voted for it.
Kelley said he would have supported using the fund balance as proposed by Lenzendorf, if the district was levying more in taxes, but it wasn’t.
“Some of the things that made the mil rate go up are out of our control,” board president Mark Johnson said.
Johnson said that the Health Reimbursement Accounts set up to pay deductibles under the new health insurance plan for district employees was an unknown cost. He noted it might well cost much less than anticipated.
Boland said that in making the estimates on HRA expenditures, he had been very conservative about the savings that might accrue, as employees did not use part or all of the funds in their accounts because they stayed healthy.
Johnson said he wanted to take an even more conservative approach toward the HRAs and be ready to back them up with money from the fund balance if necessary.
All seemed to agree with Boland that the district would have a much better idea of the HRA cost after a year of using the plan and the accompanying HRA.
Boland said the HRA was “the wildcard” in this year’s budget for the district.
In other business, the Seneca School Board:
• approved three youth options requests for Certified Nursing Assistant, Advanced CNA and another nursing assistant class for the three students, as required by law, the district will pay the students’ tuitions to take courses not offered by the district.
• heard in a report from Boland that both unions (representing both support staff and professional staff) had applied for recertification and that a state agency would hold the re-certification election
• decided to not pay $500 to continue to belong to the Rural School Alliance until it becomes clearer how effective that organization will be in the future
• chose to present the district’s monthly recognition to Kayla Chambers for her work on the Elementary School Fall Festival and to the Mt. Sterling and Utica Lutheran Churches for their donation to help needy students in the district
• agreed to hire Jamie Greene as the middle school boys and girls basketball coach
