Lindbergh budget panel to make recommendation next week
November 17, 2004 - By SCOTT MILLER
An 8-cent tax-rate increase per year is needed to cover the growing cost of operating the Lindbergh School District, according to Pat Lanane, the district's chief financial officer.
However, other funding options also exist, such as selling corporate sponsorship of the swimming pool natatorium currently under construction, the football field or even educational programs.
To meet escalating costs, the district also may have to make cuts. Lanane, assistant superintendent for finance, projects next year's budget to be nearly $850,000 in the hole.
A budget committee has been studying the situation, pondering options and preparing to make a formal recommendation to the Board of Education Tuesday, Nov. 9. At this point, all discussions are preliminary ideas only, not formal recommendations.
The committee planned to finalize its recommendations Tuesday night — after the Call went to press.
District revenues have remained — and are expected to remain — stagnant.
From the mid-1990s until this year, the district incorporated a voluntary rollback in its tax rate, which at $3.14 per $100 of assessed valuation remains the lowest of all St. Louis County school districts. While the district's assessed valuation has grown, it has not increased enough to keep revenue growth steady with expenditure growth, Lanane said.
Meanwhile, state funding is fixed at 1993 levels because Lindbergh is a "hold-harmless" district.
However, expenditures continue to increase, particularly salary and benefit expenses that account for nearly 80 percent of operating expenditures.
"That percentage has been cut to get between 70 and 80 percent," Lanane said. "I don't think we can somehow be-lieve we're going to get our personnel costs down to 50 percent of our budget. Somebody may have a great idea on that, but it's been a very constant factor.
"Insurance premiums have doubled since 1997," he said, "There's no reason to believe this isn't going to continue. I think there are some things to look at in those arenas, but to think insurance costs somehow are going to suddenly level out or stop increasing I think is maybe a foolish assumption."
Costs associated with technology as well as state and federal mandates, such as the Missouri Assessment Program and the federal No Child Left Behind Act, also are increasing. The district will have to find a way to handle those costs.
"If we think we can simply get by in the future by paying teachers, keeping them up with our neighbors and keeping up with the benefits and we'll be OK, I think we're kidding ourselves. I think there's some huge costs out there and some challenges," Lanane said.
And last year, the district made a "long list" of cuts that didn't spill over into the classroom. More cuts may begin to affect academics.
"For the most part, I don't think if you asked any of the students: 'Do you notice a change this year from last year?' I don't think most of them would say they do," Lan-ane said. "But, I will tell you, those lists were very long and we tried to think of everything and anything that wouldn't affect the classroom. If we have further major reductions — $500,000, $1 million — it will get into the classrooms. I don't see anyway around it."
On the possible tax-rate increase, Lanane said district residents probably would be more favorable of an increase supporting several years, rather than voting on an 8-cent increase each year.
"We're saying this is minimum just to break even," he said, "so that 8 cents this year, you probably have to have 10 cents or even 20 cents so you can build that, so you're not right back out in front of the public in two years. In fact that's another question. How long do you want to go to the public and say: 'We need a tax increase.' What sells in Lindbergh? I don't think people want us to ask for a tax increase each year. I just think nickel-and-diming the community would be a terrible idea."
Lindbergh voters last approved an operating tax levy increase in 1993 — a 36-cent increase to $2.78 per $100 equalized assessed evaluation. The next year though, district officials rolled back the rate to $2.42, a promise to voters, where it remained until 2001. Just this school year, the rate returned to 1993 levels. The district's debt-service levy has increased since 1993, but that revenue may only be used to retire bonds from capital projects such as Prop-osition 4, not help fund general operating expenses.
Revenues aren't increasing at a steady rate, but Lind-bergh still has one of the largest reserve balances in the state, Lanane said. Lindbergh has a reserve equal to about 40 percent of its total operating budget, which is nearly $41 million.
Lanane wants that to remain at 25 percent at least — around $10 million — to cover any "emergency" costs such as roof, plumbing or electrical failure and to prevent the district from borrowing. A recent district audit also recommended securing the reserve at 25 percent. For the current school year, the district is balancing its budget with more than than $2 million of reserve funding, Lanane said.