Cape School District looks at increase in tax levy

Reserve funds in the Cape Girardeau School District are not as low as originally predicted, but officials there say the need for an increased tax levy for the coming year is still essential.

During a budget review meeting Friday, the Cape Girardeau School Board discussed the district's finances and the possibility of raising of the tax levy by as much as 17 cents.

The board officially sets the levy every August and may, under state law, raise it by as much as 17 cents without voter approval due to a voluntary rollback the district has taken in recent years.

On Friday, the board learned that the $4.26 million in reserve fund balances they approved with the 2004-2005 budget on July 19 is actually projected to be $5.42 million at the end of the coming school year. That represents an increase from 6 percent of expenditures to 10 percent, and puts the district farther away from the state's financially distressed designation.

But district officials say it's still not enough. Chief financial officer Rob Huff said a safe fund balance for the district would be around 18 percent, or $6.3 million in reserve. Some of the savings, Huff said, are due to the early implementation of some of the $1.2 million in budget cuts the board approved in January.

"We have to keep the same mindset," Huff said. "I believe in my heart we're on our way out, but I've learned in the last four years you just can't count on that."

'Only one source of revenue'The school board has considered raising the tax levy for the past two years but has voted against it after considerable public outcry. Some members of the public feel the district should not raise the levy because of a 2001 election in which voters approved a 49-cent increase and were led to believe another increase would not be needed in the next few years.

"We made a promise we should not have made. We were not looking far enough into the future," said Charlie Haubold, board president. "There's only one source of revenue we can go to, and that's the rollback."

The district has as much as 17 cents per $100 assessed valuation that could be added to the levy. Every one cent that is added to the levy generates around $45,000 in tax revenue. The average $100,000 homeowner would pay approximately $32.30 more in property taxes each year if the district raised the levy by the full 17 cents.

"As long as we don't have those fund balances, we're on a roller coaster of feast or famine," said superintendent Mark Bowles. "Last year there was a perception that there were fat areas in the district budget, but now that perception has changed."

cclark@semissourian.com

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