| The Daytona Beach News-Journal
Analysis: could take years for US GDP to rebound
The coronavirus pandemic sent the U.S. economy plunging by a record-shattering 32.9% annual rate last quarter. It is still inflicting damage across the country, squeezing already struggling businesses and forcing a wave of layoffs. (July 30)
The Volusia County School Board approved its nearly $1 billion budget and a slight tax increase this week — complete with almost $11 million from its reserves to balance out its annual deficit.
Despite finding areas to trim the budget, the shifting landscape of education during COVID-19, years of the state’s inequitable funding system for Volusia County Schools, and ever-increasing operational costs were enough to keep the district in the red again if it didn’t dip into its savings.
More: Volusia schools’ tentative tax hike can’t overcome coronavirus uncertainties
More: Volusia schools to cut $8.5M from budget, but is it enough?
“(We’re) basically pulling money out of our savings account every year to offset those expenditures and we cannot continue to do that without resulting in a financial crisis,” explained Chief Financial Officer Deb Muller.
What does this mean for me?
The adopted tax rate is $5.91 per $1,000 of taxable value, which is down almost 3% from last year’s rate of $6.08 per $1,000. However, this year’s rolled-back rate — the rate that would produce the same revenue as last year’s rate using new assessments of the same properties — is $5.72. That means the tentative tax rate is increasing over last year, which enables the school district to generate additional revenue.
At the adopted rate, the owner of a $125,000 home with a $25,000 homestead exemption would pay $591 in taxes this year.
The adopted tax rate will generate $189 million in revenue for the district, compared to last year’s $182 million, within its $992 million overall budget.
How is there another deficit?
It’s a familiar story at this point.
Rising costs for things like retirement and health insurance can’t quite be offset by organizational shifts at the district level. The state’s funding increases pale in comparison to those rising costs — plus Volusia County is disproportionately punished by a piece of the state’s funding formula called the district cost differential, by which districts get different levels of funding depending on nebulous criteria like cost of living and amenities. And board members, in the last couple of years, haven’t forced staff to make cuts beyond what the superintendent had already initiated.
This year: First look: Volusia County Schools face $16M shortfall, at least
Last year: Projection: $10 million shortfall for Volusia County Schools
Plus, there’s a coronavirus pandemic that has brought with it increased costs. The district is still waiting on reimbursement for personal protective equipment. It received federal funding through the CARES Act, but it’s earmarked for specific purposes and can’t be used just to balance the budget.
Not to mention, the pandemic made almost 9,000 students switch to Volusia Online Learning — virtual school — which directly translates to a funding loss. In the state’s per-student funding model, the district gets $7,410 for every in-person student. For virtual school students, it gets $5,448. That means a possible $18 million loss.
Could this change?
There’s always the chance of unforeseen costs. For example, last year, the district projected the use of $8.1 million from its reserve funds, but ended up using about $10 million. Fluctuations in student count mid-year changed how much money the district received, plus it was required to share more funding for private school vouchers and, of course, the pandemic response in the spring all contributed to the even bigger deficit.
The pandemic means there are even more uncertainties this year.
The district is waiting to see if it can get reimbursed for the cost of personal protective equipment. At this point, it’s spent well over $1 million on cleaning supplies, masks, desk dividers and more. It’s possible some of that could be recouped.
Last year: Volusia Schools are short $8 million. Is that a big deal?
On the other hand, district officials have been struggling to get a handle on the enrollment count. If they’ve overestimated how many students they have, that could mean less money. Then again, enrollment could go up as it usually does in the first few weeks of school. A lot could change by December.
And it’s possible there could be mid-year cuts to education finance at the state level.
“I think within the next month or so we’ll have a much better idea of our financial picture,” Muller said.