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Budget Basics 2019-2020

School districts in the state of Kansas work on a fiscal calendar year, which runs from July 1 to June 30.  After the budget is presented to the board of education it must be published in the official district newspaper (The Newton Kansan), as set during the July organizational meeting.  Once the budget is published there must be at least a 10 day notice of hearing before the budget can be adopted.  It must also be certified by the superintendent and submitted to the county clerk by August 25 of each year.

Budget Estimates

It should be noted the budget is built on ESTIMATES in July for student counts, assessed valuation, revenues and expenses.  

Student Full-Time Equivalency (FTE)

This represents the number of students enrolled and attending in our district on a full time basis on September 20 of each year.  In order to count as full time then a student must be enrolled and in attendance at least 360 minutes per day.  If a student does not attend full time then that number is prorated accordingly.  For example if a student is only attending 180 minutes per day then they would be counted as 0.5 FTE.  The student FTE is used in calculating the district's General Fund budget amount.  Starting in 2017-18 the budget formula uses the highest of the current year or preceding year's audited student FTE or the three year average.  Table I of the Form 150 shows which number the district will use to determine funding for the upcoming year.

 

In addition to student count the district is funded based on estimated "weighted enrollments" which include high enrollment, bilingual education, career and technical education, at-risk, high density at-risk, transportation, special education, and virtual education.  The sum of these weightings is then added to the student FTE to determine the overall funding received for the district's general fund.  The final operating budget amount will not be determined until the Kansas State Department of Education (KSDE) audit is completed and the special education state aid is determined; this is typically not known until early June.

Estimated Assessed Valuation

The county appraiser determines an appraised value for personal and business property in the Newton district.  The appraised value is taken times a factor of 11.5% on personal property.  That amount is then added to taxes collected on business property and motor vehicles to determine the district's overall estimated assessed valuation and is not final until October or November.  The district's estimated assessed valuation for the upcoming year is $171.1 million.  This represents a 3.6% increase over previous year (approx. $6 million).

Fund Accounting

The budget is comprised of numerous small budgets (funds).  For example, the district has a Bond & Interest fund.  Money in that fund can only be used to pay the district's principal & interest payment on the existing debt.  Each respective fund may have different rules and regulations that must be followed. 

General Fund

The general fund is the largest fund in the district's entire budget.  General fund expenses are for instructions, student & instructional support (counselor, librarian, social worker, etc.), building administration, operations & maintenance, student transportation, student activities and athletics, and transfers to other funds.  Legislative block grants froze the general fund (and others) from FY14-FY17.  Under Senate Bill 19 in FY18, schools were funded using actual student enrollments from previous years and estimated current weighting FTEs to determine the overall general fund budget.  The Notice of Hearing (Co99), as published by the district, sets the general fund budget for FY20 at an estimated $23.387 million.

Supplemental General Fund (Local Option Budget)

This fund supplements the general fund and is set at a maximum of 33% authority.  Districts have the option to pass a resolution authorizing up to 33% but our district has not done so, therefore the district is capped at 30%.  This percent is taken time the general fund budget in a formula to determine the LOB budget.  This year the LOB is estimated at $7.1 million.  Our LOB expenses are used for technology, central office salaries and district administration, utilities, as well as transfers to other funds.  As part of the equalization requirement, the LOB also receives State Aid through a formula and our current rate is 61.81% of the LOB budget.

Estimated Operating Budget 19-20

The total published general and LOB funds combine to make up the district's overall operating budget.  This is always considered an estimate until early June when the KSDE audit and final special ed state aid is determined.

Capital Outlay Fund

This fund allows the board of education to levy taxes for items such as equipment, land/building acquisition, maintenance/upkeep of buildings (including maintenance/custodial salaries), and software purchases.  The maximum number of mills the district can levy is 8.000.  Starting in FY15 the state provided state aid.  Currently the district receives 58% of the total taxes levied as state aid.

Bond Fund

Bonds are approved by an election to build/remodel/renovate district buildings and the funds are set up to repay the debt.  The school finance law for bond elections prior to 7-1-15 currently provides for 58% state aid for our current bond debt.  Bond issues approved after 7-1-17 are currently eligible for 27% state aid.

Other Funds

There are several other funds that do not have mill rates but still make up the total budget.  Most of these funds receive transfers from the general or LOB fund.  For a full list of funds the district uses please reference the FY20 budget book.

Recreation Fund/Emp Benefits Fund

USD 373 is the taxing entity for the Newton Recreation Fund and Emp Benefits fund.  The Rec Commission fund is authorized for a maximum of 8.000 mills.  There is no maximum for the Employee Benefits Fund.  The district collects the money and passes it on to the Newton Recreation Commission.

Mill Levy

The assessed valuation and required local tax dollars combine to calculate mill rates for the county to process the school taxes.  One mill equals one tax dollar for each $1,000 of assessed valuation.  One mill will generate approximately $171,151 for our district in taxes.  (Taxpayers usually pay half in December and the remaining half in May.)  Our total mill estimate for the 2019-20 year, including the Rec Commission, is 60.874 and is a reduction of 2.443 mills from the prior year.

 

In FY19 for a home valued at $100,000 the district (incl. rec commission) levied approximately $682 worth of taxes.  Since the district's total assessed valuation increased by roughly 3.6%, a $100,000 home would now be valued at $103,600.  However, after figuring in the reduction in mill levies the taxes assessed for FY20 would be approximately $671 - an overall reduction of $11 per year.