Madison School District 2010-2011 Budget Update; Administration Proposes Spending $378,948,997, an increase of $4,702,967

The Madison School District 2.2MB PDF. The document proposes an 8.8% increase in this winter’s property taxes.
Another document references the Administration’s proposed use of increased State of Wisconsin tax dollars, despite growth in the Badger State’s deficit.
Finally, the document includes a statement on “fund equity”, or the District’s reserves (39,163,174.09 on June 30, 2010):

Statement on Fund Equity
In 1993 when the revenue cap law was enacted, the District budgeted funding to continue to increase the District’s equity (fund balance) at the same proportion as the budget increase. The actual budget was constructed based on worst case assumptions for many of the non-controllable expenses. Using worst case budget assumptions allowed some room for unexpected increased expenditures above those projected without causing the expenditures to exceed revenues. Before the enactment of revenue caps this approach did not affect the District’s ability to cpntinue to provide programming at the same levels as before. This was very sound budget practice and placed the District in an outstanding fiscal position.
After the revenue cap was enacted and until 1998 the District continued the same budgeting strategy. During these early years, continuing the increase in equity and using worse case budget assumptions was possible. It did not jeopardize the District’s instructional programs because sufficient budget reductions were possible through increased operating efficiencies.
In 1998 it became clear that to continue to budget using the same assumptions would necessitate even larger budget cuts to programs than would be necessary if a more narrow approach to budgeting was used. The effect of using a realistic but best case set of budget assumptions for non-controllable expenses was to delay making reductions of critical District educational support programs for several years. However, it also placed the District in a position to have expenditures exceed revenues if the assumptions proved to be inaccurate and the projections were exceeded.
The District’s SUbstantial equity made this approach possible without endangering the District’s excellent fiscal position. The viability of the strategy has been borne out by our Aa1 bond rating from Moody’s Rating Service and the continued excellence of our educational program.
As indicated in the annual audited financial report provided each year to the Board of Education, the District’s expenditures exceeded revenue during the fiscal years 2002 through 2006. Our desire is always to balance the revenues and expenditures on a yearly basis. However, the excess expenses over revenues in those five years resulted solely from specific budgeted expenditures and revenues not meeting assumptions and projections used at the time of budget preparation. We did not add expenditures or staff. The district maintained its fiscal health. The equity was used as it was intended – to maintain the District’s quality through difficult financial times.
We reached the point where the district’s equity position could no longer support the aggressive approach. We rnanaged the 2008-09 and 2009-10 budget more aggressively, which resulted in an increase in equity. We also prepared the 2010-11 budget more conservatively, which will result in a positive affect to the District’s equity at the end of this year.
Donna Williams Director of Budget, Planning & Accounting Services

Much more on the 2010-2011 budget here.