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State tax changes shrink SAVE revenues; district models PPEL scenarios and limited borrowing capacity
Summary
Presenters warned that Senate File 2472 will reduce SAVE per-pupil distributions and that the district projects cumulative SAVE/PPEL revenue declines; the board heard cashflow scenarios and a conservative borrowing analysis that would allow about $18.5 million of PPEL bonds in 2028 if conditions are met.
Suzanne Gerlach presented an analysis at the June 9 board meeting showing how recent property-tax legislation (Senate File 2472) will reduce statewide SAVE distributions and materially affect the district’s capital funding capacity.
Gerlach said the law shifts a growing share of per-pupil SAVE funding into the property-tax-relief fund—rising to 25% by Fiscal 2031—and conservatively projected no statewide revenue growth. Using those assumptions, she estimated the district could see a cumulative reduction in SAVE revenues of about $14.7 million over the next five fiscal years and noted statewide enrollment declines as a compounding factor.
Despite the reduction, Gerlach said the district should be able to meet existing SAVE revenue-bond debt service unless certified enrollment falls by about 1,500 students (below an estimated 12,500). She warned, however, that SAVE cashflow available for technology and other projects will be constrained for several years and that the district may have a temporary negative cash balance in Fiscal '26 depending on capital-project wrap-up.
Gerlach presented two PPEL (Physical Plant and Equipment Levy) scenarios. In a pay-as-you-go scenario, PPEL could cash-fund lifecycle projects and some technology with moderate surpluses in off years. In a borrowing scenario timed for spring 2028—assuming audits are current, no outstanding General Fund loans, and an AA-supporting audit—the analysis showed roughly $18.5 million of borrowing capacity, with estimated issuance costs and interest bringing total financing costs to about $23 million.
Board members asked about assumptions (enrollment basis, timing of turf replacements and technology costs) and discussed the tradeoffs of borrowing now versus waiting for a PPEL vote extension. Gerlach said if the board wanted to borrow earlier the district could consider timing the voter-authority vote up to a few years in advance, but borrowing before a vote would constrain future cash balances.
Why it matters: SAVE and PPEL funding pay for roofs, HVAC, turf replacements, technology and other capital needs. State changes to per-pupil distributions can reduce near-term capital capacity and shift program timing or borrowing decisions.
What’s next: Staff will refine cashflow assumptions, finalize lifecycle project budgeting and present recommendations on timing and potential borrowing options once audits and monthly liquidity issues are resolved.
