Wheatland’s Growth Leads to a Sound Financial Future and Improved Results
Wheatland’s Continued Growth.
While the Wheatland J1 School District has experienced unprecedented growth both in programming and enrollment, it has done so in a fiscally sound manner. Each year the district sets enrollment limits in January for the following year. Due to our overall success, in the last five years Open Enrollment In has increased from 25 to 130, and Open Enrollment Out has decreased from 86 to 63. Open enrollment is now a positive revenue source for Wheatland and allows us to fill gaps in grade levels where our enrollment is low without a corresponding expenditure in staffing. It now becomes important to moderate our growth to avoid additional costs. Unfortunately, we had to turn students away in two grade levels this year.
Decreased Need for Short Term Borrowing
As some of you know the manner and timing by which school districts collect revenue is inconsistent with monthly expenditures. Each month the district has to meet payroll and operating expenses, however, the revenues from local taxes and state aid come in sporadically. Specifically, there is little to no revenue in the months from October to December. Most school districts borrow to fill that gap each year. When cash reserves were lowest Wheatland borrowed over 2 million dollars each year to fill that gap. This year the gap has been reduced to just under $300,000 which will allow the district to take a line of credit as opposed to borrowing a larger amount and paying interest for the entire year. This has the potential to save the district nearly $20,000 in interest in the next year alone. This is possible due to the increase in fund balance from a low of 1% two years ago to 17% this past year.
This year the district will also be paying off two loans that were taken out prior to the referendum. One of the loans was used to complete the roof in 2014 and the other was for overall technology improvements. We were able to pay off the technology loan one year early and will be paying off the roof loan seven years early. This will save the district approximately $18,000 in interest.
District Tax Levy
Due to increased revenue through open enrollment and additional dollars in state aid, the school board has been able to keep the school-based portion of the tax levy flat for the last 4 years. This means that there has been ZERO increase in school-based property taxes in the last 4 years. In fact it has been reduced slightly during that time period from $3,353,624 to and estimated $3,311,582 this year, a decrease of 1.3% over that time period (See chart below).
Very few districts in the state have been able to reduce the overall levy in the last several years due to a decreased commitment from the state to fund schools. In addition, the general fund spending per student over that same time period has decreased (See chart below), while we have been able to increase programming and options to students at Wheatland. Wheatland has continued to grow both in enrollment and student achievement. In addition when compared to the state average, Wheatland student have performed better on state assessments in each of the last four years.
Even with all of these tremendous gains, the board will be coming to you to request a referendum at some point before 2018 due to state revenue limits. While the last referendum cost Wheatland taxpayers no additional money, in fact it reduced their overall tax burden, this process has become the new normal for districts all around the state. It is not a sign of poor fiscal management; it is simply a consequence of the way the state funding formula was conceived way back in 1993. The state fixed local district revenues at 1993 levels and then reduced aid without an inflationary increase or a corresponding funding mechanism other than a referendum.