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Orange City Schools warns of budget gaps; forecast shows possible 5-mill levy by 2028
Summary
District finance staff told the board that rising personnel and benefits costs, uncertainty in state funding and a property reappraisal shortfall could push the district to seek a 5-mill levy in 2028 unless revenues or policy change.
Todd Puster, finance presenter for Orange City Schools, told the school board May 27 that the district’s five-year forecast shows a sustained gap between revenues and expenditures and that the board would likely need to consider asking voters for a 5-mill levy in 2028 to maintain current services.
Puster opened the presentation by warning that “there is no getting around uncertainty,” citing an unpredictable state budget and the effect of a recent property reappraisal on near-term tax collections. He said property taxes account for about 80% of district revenue while salaries and benefits make up roughly 83% of spending.
The forecast shows the district’s long-term revenue trend softening after a multi-year run of rising property values. “Property taxes are the ballgame,” Puster said, urging the board to consider the timing and length of any future levy. He presented a scenario in which a successful 5-mill levy placed before 2028 would produce an uptick in revenue for several years but would not fully eliminate the long-term decline in the absence of broader changes to state funding rules.
Why it matters: Orange relies heavily on locally collected property tax revenue, and the district’s forecasting model assumes limited new state support. Puster highlighted two state policy risks: a possible return to residual budgeting for school funding and a carryover cap on balances. He said the carryover cap — currently a 30% limit discussed in the state legislature — is “very problematic for cash flow management” for districts that receive large property tax receipts in two annual tranches.
Board members pressed for specifics. Board member Rebecca asked Puster to walk through the “5-mill sustainability” slide; Puster explained the chart’s assumptions and the timing that produces a 5–7 year levy cycle under the scenario shown. Angela and other board members asked what level of program or personnel reductions would be required to stretch the timeline; Puster said most discretionary cuts would come from staffing and programs, and that many expenditures (utilities, transportation, contractual obligations) are not easily reduced.
Puster flagged additional near-term items that could affect revenues and enrollment: pending property-value appeals (which he said are expected to be resolved for many taxpayers within 30 days but could take years if appealed fully) and several planned housing developments that could add units and change the district’s tax base and student counts. He also noted that the district’s reserves remain strong enough today “to give us time to address the situation.”
The presentation included several numeric details the board discussed: property taxes ≈ 80% of revenue; state foundation ≈ 5%; salaries/benefits ≈ 83% of expenditures; and a projected deficit of roughly $1 million in fiscal 2027 under current assumptions. Puster cautioned that those figures are subject to change as the state budget and local property tax collections are finalized.
Next steps and timing: Board members noted the state budget timeline and a mid-July tax deadline for collections. Puster said the district expects to have clearer property-tax receipts and appeal outcomes within about 30 days and that he and other staff will continue to update the board’s forecast at future meetings.
Ending: Board members thanked Puster for the report and asked staff to provide additional detail at the next meeting; no formal action was taken on the forecast itself during the May 27 meeting.
