MARQUAND SCHOOL FINANCES `STRESSED'; DISTRICT HOPES TO AVOID STATE-MANADATED TAX HIKE

MARQUAND -- For the second year in a row, the Marquand-Zion public schools finished the year in the red.

The fact has not gone unnoticed in Jefferson City.

Marquand-Zion is one of only two districts in the state that the Department of Elementary and Secondary Education has identified as "financially stressed." The other is in St. Louis County.

The designation means the school board can waive its Proposition C rollback this year -- levying up to an 85-cent tax increase without a vote of the people. The district's tax cap is $3.60, which it rolls back to $2.75.

It's an option Superintendent Duane Schindler hopes the school board won't be forced to exercise.

Schindler and board members are pinning their hopes on a 30-cent tax levy increase on the ballot Tuesday. It needs only a simple majority to pass. Two similar tax levy proposals failed in April and last August.

The K-12 district serves 245 students in southeast Madison County.

"The state has told us to get our act together or they will pull the plug," said Randy Williams, board president.

The notice of Marquand-Zion's "financial stress" designation from Gerri Ogle, director of school finance for the state, was copied to Meadow Heights R-II, Woodland R-IV, Fredericktown R-1 and Greenville R-II.

If Marquand-Zion becomes insolvent, its students could be distributed among these neighboring schools, said Schindler.

But invoking the "financial stress" designation that would allow the district to waive part or all of the Proposition C rollback doesn't come without strings.

Despite the added dollars, the state would forbid Marquand-Zion from raising salaries or increasing administrative costs. This would apply until the district built up a 3 percent reserve fund in the Incidental and Teachers funds.

"We could be locked into a salary freeze for a number of years," said Schindler. "It would be pretty hard to retain and recruit staff."

Marquand-Zion's starting teacher's salary of $18,000 is already one of the lowest in the region.

The reason the law mandates a salary and administrative cost freeze is to make sure districts don't go deeper into debt, said Richard Larson, a supervisor with school finance in Jefferson City.

He said districts must apply for the "financial stress" designation by July 15 to be eligible. Marquand-Zion filed the appropriate paperwork and was granted the option.

But waiving the rollback would still require a vote of the Board of Education in August. The board next meets Aug. 12.

Last year, Marquand-Zion ended the school year with a deficit of $2,700. This year, the deficit grew to $8,500.

While it's still a small percentage of the $1.2 million budget, any deficit is in direct violation of state law, said Schindler.

If approved Tuesday, the tax levy increase would generate $18,000 in additional local dollars. But thanks to the state formula, it would net an additional $72,000 in state dollars for the district.

As in the other two elections, there is no organized opposition.

But Williams, a board member for six years, said two plants have closed in recent years. Unemployment is high and many county residents are on fixed incomes, he said.

"I can't blame people for being opposed to tax increases," he said. "But if our children are forced to go to another school in four or five years, they'll be paying higher taxes anyway."

Marquand has suffered from fiscal headaches for a number of years, and Schindler worries that taxpayers may feel the district is crying wolf.

But two years of deficit spending has elevated local budget concerns to a state matter.

"We're deficit spending and that means we're not in compliance with state law," said Schindler. "The state may very well force our hand."