The Manhattan-Ogden school district’s business services director told board members Wednesday they will have a shorter window for budget planning because of new legislation passed this year.
On the last day of the 2021 fiscal year, Lew Faust spoke about the district budget planning process and timeline. He said the passage of Senate Bill 13 during the most recent legislative session requires municipal entities, including school districts, to post public notices and hold hearings to alert residents if that entity’s budget might surpass what’s called the revenue neutral rate for a local property tax levy.
A revenue neutral rate (RNR) is a tax rate that is intended to generate the same revenue from property taxes as levied the previous year, while using the total assessed valuation from the current tax year. The rate would be lower when property valuations are up and higher when valuations are down.
The new law, which takes effect next year, is meant to inform people of how their tax dollars will be used.
Faust said the July 7 board meeting “is going to become a critical mark for us” as the district must notify the Riley County Clerk by July 20 if they are going to exceed the RNR. Faust said he will get one combined document from county clerk Rich Vargo detailing all the figures that determine the RNR. He said an increase in the district’s assessed valuation of 1.13% will mean the district’s budget will barely surpass the RNR, which triggers a series of individual mailings and public hearings.
“Every district in the state that has an increase in assessed valuation has to do this, which is almost everybody,” Faust said. “It’s not a choice, it’s something we have to do.”
However, government entities can lower their tax rates to not exceed the RNR.
Vargo told The Mercury on June 19 that the new law will in turn cost taxpayers more money to implement. It will cost Riley County more than $18,000 next year to send out the mailings, and an additional $30,000 to update the county’s computer software to accommodate the changes in calculations stemming from the law.
The process outlined by SB 13 starts with notifying the county clerk of the intent to surpass the RNR. Next, notices must be placed on a city’s website and in the local newspaper by Sept. 10, as well as 10 days before a budget hearing is scheduled. Informational mailings are sent out to people during this time.
By Sept. 20, a tax rate and budget hearing must be held to give taxpayers the chance to comment on the budget. Then, the entity must adopt a resolution or ordinance confirming their budget surpasses the RNR, and finally the proposed budget can be adopted.
Faust also presented budget projections for fiscal year 2022. The total estimated general fund for the district is at $49.4 million for next fiscal year, which is an increase of $1.75 million over the FY 2021 general fund. The local option budget also sees an increase of about $112,000, from $15.47 million to $15.58 million, respectively. The district’s total budget authority also jumps, from $63.13 million to $64.99 million.
Board members later approved a salary supplement for managerial employees in the district. Faust said the extra $750 is meant for administrators, coordinators and managers in the district. Halfway through the 2020-21 school year, classified staff received a slight boost in pay to compensate for the added stress of working through the pandemic. This pay supplement will cost the district $600,000, with the money coming from additional federal payments for COVID-19 relief. It will be included in the district’s July 16 payroll schedule.
In other business, the board received several written reports, including one on student participation in athletics and activities at Manhattan High School. For the spring 2021 season, there were 45 students in MHS baseball, 28 in softball, 36 in girls’ soccer, 230 in boys and girls track, 28 in boys’ tennis, 14 in boys’ golf, and 35 in girls’ swimming.
Administrators believe the drop in participation from 65% in the 2019-20 academic year, to 58% in 2020-21, relates directly to the pandemic and lower enrollment for in-person classes.