Central Dauphin School District2020-2021 Budget Presentation #8

May 4, 2020

Topics to be Discussed

• National, state and local economic conditions• Proposed budgeted revenues and expenditures• Use of budgetary reserve and fund balance• The state of fund balance• Options to close the remaining budget short-fall• Board discussion

2020-2021 Budget TimelineApprove the Resolution NOT to exceed 3.1% tax increase (no later than 1/14/2020)

Adopt the Preliminary Final Budget (no later than 5/31/2020)

Adopt the Final Budget (no later than 6/30/2020)

Post the Proposed Preliminary Budget with a tax increase including available exceptions (1/19/2020)

Advertise a notice of intent to adopt the Preliminary Budget AND a notice to seek referendum exceptions from PDE (no later than 10 days prior to adoption)

Approve the Preliminary Budget with a tax increase including exceptions (no later than 1/29/2020)

NO

YES

8.8%

https://fred.stlouisfed.org/series/PADAUP3URN Updated April 29, 2020 10AM – 1 month behind

Historical Unemployment Data

2013 2014 2015 2016 2017 2018Pennsylvania

Civilian Labor Force 6,396,000 6,406,000 6,445,000 6,447,000 6,418,000 6,363,000 Employment 5,968,000 6,060,000 6,109,000 6,103,000 6,108,000 6,088,000 Unemployment 428,000 346,000 336,000 344,000 310,000 275,000 Unemployment Rate 6.7% 5.4% 5.2% 5.3% 4.8% 4.3%

Dauphin CountyCivilian Labor Force 138,800 140,100 142,200 142,500 141,100 141,000 Employment 130,500 133,200 135,800 135,900 134,600 135,600 Unemployment 8,300 6,900 6,400 6,600 6,500 5,400 Unemployment Rate 6.0% 4.9% 4.5% 4.6% 4.6% 3.8%

Variance 0.7% 0.5% 0.7% 0.7% 0.2% 0.5%

US Department of Labor and Statistics. https://www.bls.gov/eag/eag.pa.htm

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

2013 2014 2015 2016 2017 2018

Unemployment Rate Trends

PA Unemployment Rate Dauphin County Unemployment Rate

19.0%

12.9%

4.0%64.100%

Large EIT Sectors

Government Medical Insurance All Others

$-

$5,000,000.00

$10,000,000.00

$15,000,000.00

$20,000,000.00

$25,000,000.00

$30,000,000.00

$35,000,000.00

$40,000,000.00

$45,000,000.00

September October November December January February March April May June July August Accruals

Cumulative EIT Collections

2016-2017

2017-2018

2018-2019

2019-2020

PA School Business Officials Local Revenue Loss Model

Set 1 Set 2

Earned Income Taxes 17.50% 15.00%

Current Real Estate Taxes 2.25% 1.95%

Interim Real Estate Taxes 50.00% 50.00%

Real Estate Transfer Taxes 40.00% 28.00%

Delinquent Taxes 35.00% 25.00%

Investment Earnings 80.00% 80.00%

https://www.pasbo.org/blog_home.asp?Display=122

CDSD’s Earned Income Tax Projected LossCDSD's EIT Collections - 2019 (Audited) 41,529,885$

15% Reduction (6,229,483)$

17.5% Reduction (7,267,730)$

20% Reduction (8,305,977)$

LEA Name County% Reduction in Local Revenue

for 2020-21

$ Reduction in Local Revenue

for 2020-21

% Reduction in Local Revenue

for 2020-21

$ Reduction in Local Revenue

for 2020-21

Central Dauphin SD Dauphin -8.00% (12,188,376)$ -6.69% (10,184,707)$

Assumption Set 1 Assumption Set 2

PA School Business Officials Local Revenue Loss Model

https://www.pasbo.org/blog_home.asp?Display=122

Expenditure Reductions

• Field Trips - $115,000• Athletic supplies - $21,110• General supplies - $21,586• Miscellaneous - $9,148

• Additional reductions = $166,844

Ways to Cover the Budget Shortfall

• Budgetary reserve• Use of stabilization funds• Use of fund balance• Real estate tax increase• Possible labor union concessions

Budgetary Reserve

• Spring Season Athletics• Student Transportation• Buildings and Grounds• Safety and Security• Special Education• Instruction• Copy Shop• Purchase of Chromebooks

• Net projected estimated savings $2.3 million

Use of Stabilization Funds

$16.3 Current Balance4.4 Budgeted use in FYE 20203.5 Budgeted use in FYE 2021

$ 8.4 Remaining balance

EIT shortfall will require $6.2 million to $8.3 million in FYE 2021

Use of Fund Balance

• 24 PS 6-688 – Limitations on certain unreserved fund balances. • For the 2005-2006 school year and each school year thereafter, no

school district shall approve an increase in real property taxes unless it has adopted a budget that includes an estimated ending unreserved, undesignated fund balance less than the percentages set forth as follows:

Annual Real Estate Tax IncreaseFor Discussion Purposes Only

Assessed Current 1.75% 1.95% 2.50% 2.75% 3.10%Value 16.5672 16.8571 16.8903 16.9814 17.0228 17.0808

116,000$ 1,921.80$ 33.63$ 37.48$ 48.04$ 52.85$ 59.58$ 150,000 2,485.08 43.49 48.46 62.13 68.34 77.04 200,000 3,313.44 57.99 64.61 82.84 91.12 102.72 250,000 4,141.80 72.48 80.77 103.54 113.90 128.40 300,000 4,970.16 86.98 96.92 124.25 136.68 154.07

*Does not include any homestead/farmstead exclusion amounts

Labor Union Concessions

• Tuition Reimbursement • A one-year curtailment could save the district approximately $550,000

Options to close the gap

Option 1• $3.5 million in reserves• $550,000 savings in tuition• 1.95% tax increase

Option 2• $3.5 million in reserves• $550,000 savings in tuition• 1.75% tax increase• 200,000 in fund balance.

Board Discussion