2018-19 operating budget update: context and budget landscape · • personal income tax...

2018-19 Operating Budget Update:Context and Budget Landscape

Board of Education

February 27, 2018

Trends and Context

2

Total Operating Budget is $1.41 billion*Operating Budget only – does not include Capital or Enterprise Funds

Where does our funding come from?2017-18 Adopted Budget*

3

$837.8M, 60%$124.5M, 9%

$428.4M, 30% $18.8M, 1%

Sources (in millions)

State

Federal and Other Grants

County

Other and Special Revenue

Total Operating Budget is $1.41 billion*Operating Budget only – does not include Capital or Enterprise Funds

How are those funds used? 2017-18 Adopted Budget*

4

$851.5M, 60%$312.3M, 22%

$125.6M, 9%

$69.9M, 5%

$.88M, 0%

$49.6M, 4%

Uses (in millions)

Salaries

Benefits

Purchased Services

Supplies and Materials

Furniture and Equipment

Other

The total budget has increased by 18% since 2009

Adopted Budget

5

$1,194,709,778

$1,140,509,220 $1,150,186,045

$1,169,398,626

$1,202,538,670

$1,242,707,869

$1,311,895,149

$1,346,730,237 $1,377,873,795

$1,409,869,340

$1,100,000,000

$1,150,000,000

$1,200,000,000

$1,250,000,000

$1,300,000,000

$1,350,000,000

$1,400,000,000

$1,450,000,000

Uses of Total Operating Budget Increase Since FY09: A Different Perspective

Total RemainingTotal Increase since FY09 $215.2

Charter School Pass-through -$36.7M $178.5M$ Not retained for CMS students

Mandated salary & benefit increases -$281.3M -102.8M

Sustaining, Growth and New Space -$111.8M -$214.6MDay-to-day operating expenses

Reductions and Redirections +$258.4M $43.8MRealignment of existing resources

What was left

New initiatives to support -$43.8M $0Strategic Plan 2018

6

Total Increase of$215.2 millionsince 2008-09

CMS enrollment growth trend20th Day enrollment this year was 147,359 students

- up 202 students over last year- up 13,299 students or 10% since 2009

Student Enrollment Growth (20th day)

7

134,060 133,664

135,638

138,012

141,171

142,612

145,363

146,140

147,157 147,359

130,000

132,000

134,000

136,000

138,000

140,000

142,000

144,000

146,000

148,000

150,000

08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18

# o

f C

MS

Stu

den

ts

Budgeted Per Pupil By Funding SourceOverall per pupil increase of 4% increase since 2009 (without charter $)

Adopted Budget $ change per pupil

since 2009

+$304

+$278

$39

+$84

-$46

+$381 overall (without charter $$)

8

$2,524 $2,277 $2,119 $2,256 $2,247 $2,339

$2,467 $2,508 $2,518 $2,563

$2,621 $2,374 $2,228 $2,379 $2,390 $2,500

$2,671 $2,766 $2,810 $2,899

$5,360

$4,756

$4,680 $4,799 $4,936 $5,018 $5,155

$5,330

$5,480 $5,664

$758

$1,241 $1,370

$1,163 $1,022 $1,063 $1,057 $979 $936 $842

$173 $162 $202 $132 $170 $133 $142 $140 $137 $127 $-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18

County w/o charter County State Federal Other

Fiscal Year 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18

Budgeted Per Pupil $ 8,815 $ 8,436 $ 8,371 $ 8,350 $ 8,375 $ 8,553 $ 8,821 $ 8,957 $ 9,071 $ 9,196

Per Pupil Expenditure Ranking In 2017 North Carolina ranked 43rd - up from 44th in 2016

National Average = $11,984

Source: National Education Association Research, Estimated Expenditures for Public Schools 2016-17

9

State Rank Per Pupil State Rank Per Pupil

Vermont 1 $ 24,421 Maine 42 $ 8,956

New York 2 $ 22,659 North Carolina 43 $ 8,940

Alaska 3 $ 21,261 Mississippi 44 $ 8,361

Connecticut 4 $ 20,861 Nevada 45 $ 8,165

District of Columbia 5 $ 20,640 Oklahoma 46 $ 8,164

New Jersey 6 $ 20,556 North Dakota 47 $ 8,077

Massachusetts 7 $ 18,072 Arizona 48 $ 7,501

Wyoming 8 $ 17,052 Indiana 49 $ 7,267

Rhode Island 9 $ 16,401 Utah 50 $ 6,906

New Hampshire 10 $ 16,200 Idaho 51 $ 6,515

State Biennium Revenue and Economic Outlook

10

State Revenue and Economic Outlook

11

The Fiscal Research Division recently issued the General Fund Revenue update.

Update Highlights:

• The economy is on solid footing and remains in a stable growth pattern. Forecasters project this pattern will continue throughout 2018.

• Economic conditions are tracking closely with expectations; collections are expected to remain on target throughout the fiscal year.

• Federal tax changes will not have a significant, ongoing impact on the state’s revenue, but taxpayers shifting income between tax years could affect final payments in April of 2018 and 2019.

• The economy is stronger than it was a year ago and is beginning to look like an economy that has entered into a true expansionary phase.

Source: General Fund Revenue Update dated January 22, 2018, Fiscal Research Division

State Revenue Outlook

12

Current Fiscal Year Revenue

• For the first half of the 2017-18 fiscal year, General Fund revenue was $42.6 million below the $10.8 billion revenue target. However, the state is still on track to reach the fiscal year’s $23.1 billion revenue target.

• Personal Income tax collections are $62.5 million below the revenue targets for the first half of the fiscal year. This is 1.1% below the forecast target.

• Sales tax collections were off by 0.7%, or $27 million below 6-month target. Collections did improve in the second quarter (October through December). Baseline growth indicates that collections are close to forecast expectations, but will need a modest uptick in order to meet the forecast for the fiscal year.

• Collections from corporate taxpayers are nearly on target, at a net $8.2 million below the $517 million 6-month target. Corporate income tax collections are down significantly over last year, largely due to the state rate reduction from 4% to 3% effective with tax year 2017. This drop was anticipated in the forecast for FY 2017-18. However, collections after that adjustment are still 17% below target.

Source: General Fund Revenue Consensus Forecast memo dated February 9, 2017, Fiscal Research Division

2018-19 Early Budget Assumptions and Challenges

13

• Consider adjustments outlined in the second year of the state’s 2017-19 biennial budget:

Reduction to textbook and digital materials funding ($11.3M) due to nonrecurring funding

Reduction in central office funding ($4M)

Reduction to cooperative innovative high school funding ($.6M)due to nonrecurring funding

• Assume the state will fund at prior year funding ratios for teacher positions so hiring can begin in the spring – funding in other categories will have to be evaluated later in the process depending on signals from legislature.

• The state’s biennial budget indicates an increase in certified salaries (teachers and instructional support staff) ranging from 0% to 14%. CMS is planning for a 3% increase for all other staff.

• The state’s biennial budget indicates an increase in benefit costs as follows:

Health rate from $5,869 to $6,104 annually per employee

Retirement rate increase to 18.44% up from 17.13% in 2017-18

• Preliminary projections for CMS enrollment show a decline of approximately 200 students.

Early Budget Assumptions

14

• Charter school enrollment is likely to increase with growth in existing charters as well as the addition of new charters next year in Mecklenburg county. Charter school enrollment/funding process needs to be further examined as they present more significant impacts with growing numbers.

• Federal grant allotments for CMS are not typically available until late spring.

• Our primary ability to raise revenue is via competitive grants which we continue to aggressively seek – somewhat limited and almost always linked to a specific strategy, population, etc.

• Too early to predict county funding level, but anticipate CMS will rank among the county’s top priorities for funding – consistent with prior years. Currently, the county projects a $30.5 million increase in general fund revenues over the prior year.

Early Budget Assumptions

15

16

House Bill 90 - passed by the General Assembly on February 13, 2018, and is expected to become law in 30 days as the governor's office has stated that he will allow the bill to become law without his signature. Key highlights include:

Class size - phases in class size requirements over four years.

• Exempts all enhancement classes in grades K-12 and dual language immersion classes from class size restrictions and caps, thereby eliminating the need for districts to seek waivers for these classes in certain circumstances as required under current law.

• The phase-in for the core class size requirements, which had been set to take effect in 2018-19, is detailed below. As you can see, there will be no change to the class size requirements in 2018-19.

House Bill 90

Source: NCASA Summary

2017-18 & 2018-19 School Years 2019-20 School Year 2020-21 School Year 2021-22 School Year

State Allotment

Ratios

Maximum District

Averages

Maximum Individual

Classes

State Allotment

Ratios

Maximum District

Averages

Maximum Individual

Classes

State Allotment

Ratios

Maximum District

Averages

Maximum Individual

Classes

State Allotment

Ratios

Maximum District

Averages

Maximum Individual

Classes

K 18 20 23 18 19 22 18 18 21 18 18 21

1 16 20 23 16 19 22 16 18 21 16 16 19

2 17 20 23 17 19 22 17 18 21 17 17 20

3 17 20 23 17 19 22 17 18 21 17 17 20

17

Enhancement Allotments

• A separate allotment (funding category) will be established for program enhancement teachers and funding will be phased-in beginning with the 2018-19 school year. Details of this phased-in approach include:

• Fully funds 3,503 K-5 enhancement teachers (state-wide) through a new allotment established through a four-year phase-in as follows:

2018-19 – Provides $61.4 million in recurring funds to support 25% of full funding needed to provide K-5 enhancement teacher for every 191 students (1:191 ratio).

2019-20 – Increases this allotment’s funding to 50% of amount needed for 1:191 ratio.



House Bill 90


18

Other provisions

• Places new restrictions on the Classroom Teacher allotment effective 2021-22 to prevent these funds from covering K-5 enhancement teacher, which will be fully funded in the new Enhancement Allotment in that year. The Classroom Teacher funds will continue to cover K-12 classroom teachers, enhancement teachers in grades 6-12, self-contained exceptional children teachers, and math, science and computer teachers.

• Funds in the K-5 Enhancement Allotment may be used for classroom teachers but not vice versa.

Pre-K funding - appropriates funds for the NC Pre-K program in future years – FY2020 and 2021 – to address 3,000 students (state-wide) currently on the NC Pre-K waiting list.

House Bill 90


CMS’ Per-Pupil County Funding is $39 Higher Now Than in FY09 Excluding Charter Pass-Through $$

$49.6 million goes to charter schools in FY18 reducing the funding to support CMS students

19

$2,621

$2,374

$2,228

$2,379 $2,390

$2,500

$2,671

$2,766

$2,810

$2,899

$2,524

$2,277

$2,119

$2,256 $2,247

$2,339

$2,467

$2,508 $2,518

$2,563

$2,000

$2,050

$2,100

$2,150

$2,200

$2,250

$2,300

$2,350

$2,400

$2,450

$2,500

$2,550

$2,600

$2,650

$2,700

$2,750

$2,800

$2,850

$2,900

$2,950

FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18

"Computed" County Per Pupil Funding (including pass-through funding)

"Effective" County Per Pupil Funding for CMS Students (without pass-through funding)

The CMS 2018-19 Operating Budget Landscape:Budget Drivers and Estimated Increases

New SpaceStaffing-New Schools $.8M

Staffing-Additional Space $.4M

(No anticipated

enrollment growth)

$1.2 million

CharterPass-through

1,800 students(Estimate based on

3 year average)

$4.1 million

Benefit Rate

Increases*18.44% - Retirement$6,104 - Health Ins.(*per biennial budget)

$3.5 million Local

Supplement Increase

(7%-10% increase to local supplement amount is approx.

$7M-%10M)

TBD

Salary Inc.Range 0% -

14% forTeachers/

Other Certified

staff(*per biennial

budget)

$7.9 million

Priorities &New Investments

TBD

20

TBD

SustainingOperationsMS Athletics $.3MUtilities Rate Inc.

$.9M

$1.2 million

Salary Inc. Avg. 3%

Principal/Assistant

Principal and Non-certified

staff

$3.1 million

Stakeholder Budget Input

21

22

Engaging Our Stakeholders in theBudget Development Conversation

Superintendent presents

2018-19 Budget Recommendation

April 11, 2018

Student Leaders

Leadership Team

Community

Professional Organizations

Superintendent’s Teacher Advisory

Council

23

Common Themes Beginning to Emerge

• Maintain funding for teacher assistants

• Increase funding for certified staff local supplement

• Increase funding for student support services

• Decrease English Learners teacher ratio

• Increase in custodial allotment

• Expand Cultural Proficiency training

• School security enhancements

• Bus garage and bus washing stations

Board feedback?

Key Dates

24

Key Dates

25

Feb 273:30 p.m.

Board of Education work session CMGC5th floor

March 1511:00am-12:30pm

Community Engagement – Town Hall Meeting CPCC Culinary Center

March 156:30pm-8:30pm

Community Engagement – Town Hall Meeting Harris YMCA


Community Engagement – Town Hall Meeting Belmont Center


Community Engagement – Town Hall Meeting Simmons YMCA


Community Engagement – Town Hall Meeting Morning Star Lutheran Church

April 106:30pm-8:30pm

Community Engagement – Town Hall Meeting Christ Community Church

April 11 Superintendent presents 2018-19 Budget Recommendation BOE MeetingCMGC Meeting Chamber

April TBD

Sharing Superintendent’s Budget Recommendation TBD

Date Activity Location

Key Dates

26

April 246:00 p.m.

Public hearing on Superintendent’s Budget Recommendation/tentative budget work session

BOE MeetingCMGC Meeting Chamber

May 86:00 p.m.

Board of Education approval of 2018-19 Budget Request BOE meetingCMGC Meeting Chamber

May 15 Board of Education’s 2018-19 Budget Request submitted to the county

May 173:00pm

Board of Education/Board of County Commissioners workshop on budget

CMGC, Room 267

May 24TBD

County Manager’s Recommended Operating and Capital Budgets presented to BOCC

CMGC Meeting Chamber

June 4 Public hearing on county’s budget CMGC Meeting Chamber

June 19 County adopts 2018-19 Operating Budget CMGC Meeting Chamber

July-Sept 2018-19 Operating Budget finalized and approved by BOE BOE meetingCMGC Meeting Chamber

Date Activity Location

27

Superintendent Remarks and Board Comments

2018-19 operating budget update: context and budget landscape · • personal income tax...

Documents