LOB - Questions and Answers

What is the Local Option Budget?

This is a part of our budget that works just like the General Fund.  Money from this fund can be spent on nearly any expense to operate our school. The money for this fund comes from a local tax levy.  State funding is not provided.

How is the Local Option Budget established?

It is based off of the General Fund budget, which is based on the student enrollment count.  The LOB can be up to 30% of the General Fund budget.  This can fluctuate according to budget needs, but has been at this 30% maximum for many years.

What is the mill levy for the LOB?

The current mill levy for the LOB is 19.5 mills.  It was 19.4 mills the year before and 21.7 the year before that.

Why does the mill levy change?

It depends on the assessed valuation of property in the district.  If the valuation is lower, the mill levy could be higher…and vice-versa.  The LOB budget is currently at its maximum legal amount at 30% of the General Fund.  If the General Fund changes, the LOB budget (and mill levy) will change with it.

What is the special election for?

The election is to give the Board of Education authority to raise the LOB to a maximum of 31% rather than 30%.  New legislation takes effect on July 1 that would allow the Board to take that to a maximum of 33%.  So, the election question is to allow a maximum of 31%, but it will really be a maximum of 33%.

Why is an increase in the LOB needed?

For next year, our school will see a decrease in state funding of about $19,000.  This is because of the recently passed school finance legislation.  This legislation also allows school districts to increase the Local Option Budget to make up for this loss.  Increasing the LOB gets more funds in the right areas of our budget and into classrooms.

Can’t we just reduce expenses to make up for the lost funding?

USD 350 has been reducing cash balances for the past 3 years.  We look for ways to be more efficient and cut costs every year.  One teaching position will be eliminated for next year and other recent budget reductions on the first page.  Continued reductions in funding will require even further cuts to personnel and student programs.

I’ve heard that school funding is higher than it has ever been.Is this true?

Our enrollment has increased each of the last two years, but has steadily declined in the years before that.  However, funding for our operating budget has decreased more than the decrease in enrollment.  Consider this: From 2008-09 to 2012-13 per pupil expenditures in the two main operating funds has decreased 1.7%.Inflation over that same time period is 7%.  Costs have gone up while funding has decreased.This is not a sustainable situation; further reductions will make this worse.

Will this increase the overall school district mill levy?

Increasing the LOB will increase the mill levy for that particular fund.  The Board has the option reduce other parts of the school budget to offset some or all of the increase in the LOB.  The Capital Outlay fund has a mill levy of 8 mills for the 2013-14 school year.  This is one area of the budget that could be reduced to keep the mill levy flat.

How will reducing other parts of the budget help?

The Capital Outlay fund can only be used for specific purposes: major equipment, vehicles, building improvements, etc.  The district cannot buy textbooks or pay teacher salaries from this fund.  So, a reduction in the Capital Outlay budget does not affect the operation of our schools as much a reduction in the operating funds.

Is this just shifting funds from one part of the budget to another?

Yes.  Having more dollars in the Local Option Budget means more money spent on classrooms…but it could mean fewer dollars in our Capital Outlay budget.  That is a shift that makes sense for educating kids.

What will happen if voters approve of the increase in the LOB?

The district will look to increase the LOB to the maximum and get more dollars in the classroom.  The goal is to offset some or all of that mill levy increase by decreasing the Capital Outlay mill levy.

If voters approve, will my taxes go up?

We cannot say what will happen with property taxes since we do not know about property valuations yet.  There is no way to guarantee what the mill levy will be for next year.  But, if the LOB is increased, the goal will be to adjust the budget to maintain a total mill levy very close to its current level.  Again, this all depends on what happens with property values.

What if voters do not approve of the increase in the LOB?

The district will have to find a way to cover increasing costs and deal with a $19,000 loss in funding for the 2014-15 school year.

Who can I contact if I have further questions?

You can contact a board member or the district office at 549-3564 with any questions or to request additional information.