Cape school officials discover budget deficit

Tuesday, June 24, 2003

Continuing revenue disappointments in the Cape Girardeau School District have district officials worried about the possibility of falling under state control as fund balances drop.

The Cape Girardeau School Board hashed out the district's financial woes during a special meeting Monday, discussing the growing likelihood of a tax increase, maintenance delays and other cost-saving measures.

With the current fiscal year coming to a close June 30, district officials have received more accurate fund balance information and have learned there was a 4 percent, or $1.2 million, deficit in the 2002-03 budget, bringing the year-end balances to 9 percent of expenditures.

Next year's budget was passed June 16 and was based on the 2002-03 budget before officials realized the deficit existed. Officials now worry that, combined with state funding cuts and a lack of property tax revenue growth, the deficit could drag the district's overall fund balances below the state's requirement of maintaining 3 percent of expenditures in reserve.

The district is considering increasing the tax levy by 7 cents per $100 assessed valuation to generate an estimated $280,000.

The move, which does not require voter approval, would mean an additional cost of $6.65 annually in property taxes for the average owner of a $50,000 home.

The current tax levy is set at $3.99, and the district could legally raise that to $4.15 per $100 assesses valuation for next year.

In recent years, though, school board members have chosen not to tax to the district's maximum ability under law, but state budget cuts are forcing them to take a closer look at the option.

"The consequences of not doing this, I feel, is that the state will step in next year and there will be salary freezes," said chief financial officer Rob Huff.

The tax increase issue will be decided when the school board sets the annual tax levy at its August meeting.

The possibility of dropping below the 3 percent fund balance limit imposed by the state is not new to the district. In 2000, the district narrowly escaped a state violation when reserve funds dropped to 4 percent.

"I feel like our backs are against a wall," said board member Dr. Steven Trautwein.

Board members also discussed the possibility of capping employee medical insurance, not replacing three computer labs, saving money on textbooks, limiting maintenance projects and reducing staff through attrition for a combined savings of $810,000.

"We've seen worse than this," Huff said. "By making some hard decisions, we'll get through this."

335-6611, extension 128

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