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School plans tax increase to offset state funding cuts

Posted 9/20/16 (Tue)

By Jody Michael
The Divide County School District intends to increase its property tax levy by 12.39 percent for the new school year in response to a projected 30 percent decrease in state funding.
“State sources -- that’s where our shortfall is,” Board Member Steve Feil said during the district’s budget hearing Thursday.
Though revisions in April 2015 to a formula established by the North Dakota Legislature had doubled the district’s oil and gas revenue in the 2015-16 school year, Superintendent Sherlock Hirning said the state is reducing its funding by roughly that same amount this year.
“The increase in oil and gas revenue, which was $1.6 million instead of $800,000, was deducted from our state aid,” Hirning said. “We have to make up the difference.”
Business Manager Barb King said the state sends the school district a worksheet each year to determine the amount of funding it will receive. The amount of non-oil state revenue is estimated to decrease by more than $800,000, from $2.52 million down to $1.65 million.
The oil revenue has shrunk as well in the district’s estimates, down to $1.25 million, due to continued production decreases in the state -- though Hirning said estimating this line item in advance is difficult.
“We’re hoping it’s going to be $1.2 million, but I have no idea,” Hirning said.
A roughly $80,000 increase in federal support is expected for the district’s Title I and II programs and will somewhat alleviate the shortfall elsewhere. 
General-fund expenditures in the new budget have increased by less than 1 percent -- up $13,277 from last year, to $6.5 million.
Hirning noted that the district underspent last year’s budget by $900,000.
“We certainly anticipate we will underspend again,” Hirning said. “We over-budget because we really don’t know the exact dollar amount.”
Board members expressed frustration over the need to increase taxes.
“Property tax is maybe not how schools should be funded,” Board Member Jessica Busch said. “That wasn’t a decision of our board.”
Putting student success at risk is not an option, board members said.
“Three years ago, we tried to make budget cuts,” Elementary Principal Tanja Brown said. “This library was full of people telling us not to.”
The board will vote on the budget at its next meeting, Oct. 6. Also expected at that meeting, a first look at estimates for the next phase of building additions.

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