In any given year, changes to the world of school finance are inevitable. Much like the rest of our lives, the COVID-19 pandemic has added an entirely new layer of complexity to school finance.
More than 90% of school district revenue is generated based on student enrollment. With a large number of students across the state opting for online learning or homeschool education this year, school districts have seen a large decrease in pupil-generated revenue.
To offset some of the lost revenue, the federal government enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act, allowing districts access to additional funding.
Annually, our truth in taxation meeting is held in December to certify property tax levies on properties in the school district. Because in-person meetings are being restricted, our school board meetings are held virtually. Pine River-Backus residents are able to attend virtually through a Google Meet link or watch the livestream on our district website.
At this year’s meeting, we discussed changes to the levy between budget years. This year we were able to recognize a debt service levy reduction of $26,708 due to refunding (refinancing) our 2012 general obligation bonds. Over the next 10 years of the bond the district will save more than $250,000 in interest costs.
Certifying the property tax levy is the first step of building a budget for the coming school year. Our levy accounts for nearly 10% of our overall revenue.
The next step is to create an enrollment projection on what students you assume to be in the buildings next year. As a district we will have to decide if the reduced COVID-19 enrollment counts are going to hold for another year or come back to pre-COVID-19 levels.
Once enrollment numbers are set we are able to use the Ehlers Budget Projection Model to project fund balances, revenues and expenses going forward. We use this information to determine if reductions to budgets are necessary or if additions to staffing or programming are feasible.
Pine River-Backus is fortunate to have a healthy fund balance to help weather the storm that COVID-19 has created. We continue to monitor the changes to school finance and will remain diligent in our planning to ensure PR-B remains ready to serve our students, staff and community.
Jolene Bengtson is business manager for Pine River-Backus Schools.