(LFC Comments: We wanted to illustrate what is happening to public school finances, and why we believe that they are pricing seniors and those living on fixed incomes out of their homes that they have worked all their lives to achieve. We used Riverside School District as an example.)
Below is a print-out of the five year financial projections provided to the State of Ohio Department of Education by Lake County’s Riverside School District. We added the “% of Total” columns and summarized the total payroll expenses. (Personnel Services and Benefits).
Here is a link to the Dept. of Education website for you to verify their numbers.
Here is a link provided by the State to help read the five year forecasting (see page #5 – #6 for explanation of revenues and expenditures):
Since there are a lot of numbers to review, we tried to simplify the analysis and compared the actual calendar year results for 2017 versus the forecasted results for 2024.
We used this website to calculate the compound annual growth rate % [CAGR]: https://www.investopedia.com/calculator/cagr.aspx
We can see that total annual revenues and other financing sources are projected to increase by $6,064,399 (14.7%) from 2017 to 2024. Property taxes from the community will continue to contribute 76% of the school’s revenue, and will increase by $8.2 million in 2024. This equals a compound annual growth rate of 4.32% each year. Property taxes from the State of Ohio generated from the Homestead Exemption and Roll Back Credits will only increase by $113,489 (3.1%). There is a projected loss of “Grants-in-Aid”, which is the State’s school funding formula, of $364,063 in 2024.
But wait…what is happening to their expenses…it is ALL ABOUT THEIR PAYROLL EXPENSES!
Annual personnel services (teachers and administrators wages) are projected in 2024 to increase by $6,015,930 (27.5%) in 2024. This is a CAGR of 3.53% per year.
Annual employee retirement and Insurance Benefits are projected in 2024 to increase by $4,584,421 (51.5%). This is a CAGR of 6.11% per year.
When we combine both the wages and benefits, they are projecting for 2024 an increase of $10,600,351 (34.4%) over 2017. This is a CAGR of 4.32% per year.
We ask the taxpayers in the Riverside school district living on fixed incomes, can you afford to continue to support ever increasing school levies that are paying annual wage and benefits increases of 4.32%? Is your annual income increasing by 4.32% per year. If your sole source of income is social security then we already know the answer.
Please note that the projected property tax increases are 4.32% each year. And where is it going ? Yes, directly to the payroll and benefits.
When we consider that the Riverside school board are contemplating building a new 6 – 12 grade school costing in excess of $100 million, we shudder to think what will happen to seniors on fixed incomes. We were told that it would be ~5 mill levy for 20+ years. That would equate to $175 per year for every $100,000 of the home market valuation. ($35.00 x 5 mills)
When schools do not get their way with the passage of levies, they automatically punish the kids by removing busing, band, sports, but, in reality, the overwhelming majority of their expenses is in their payroll expenses and benefits.
Please take a look at this previous article showing the Riverside School District as being on the State of Ohio EdChoice program for perceived deficiencies next year.
We plan to again review the Lake County Financing District Renewal levy to see if we can shed additional light on this subject for the taxpayers. So, stay tuned for more on the Riverside School District levies.