Finance committee recommends full levy after roughly $500,000 drop in state aid

The Merton Community School District finance committee on Monday recommended that the full school board approve setting the district’s tax levy at the maximum after the district’s state aid estimate fell by roughly $500,000 compared with projections, the committee chair said.

Chair, who opened the finance committee meeting, said quarter 1 revenues were "looking good" and up a few thousand dollars from a year earlier, but that the biannual state budget provided no increase in state aid and the district’s estimate of state aid dropped from about $5.1 million to roughly $4.6 million.

"We were anticipating $5,100,000. Ultimately, they gave us $4,600,000," the Chair said, adding that the decline effectively shifted more of the burden to local property tax levies because the district’s equalized property values rose and the state formula adjusts aid as districts become more property rich.

The chair said the combined revenue-limit math creates a levy "of about $10,680,000" and recommended a 3.30 mill rate to produce what the district presented as the actionable tax levy. "Tax levy would be $6,023,967 moving forward," the Chair said.

Committee members discussed alternatives, including using fund balance to cover part of the shortfall. The Chair said tapping $250,000 from fund balance would require moving to an unbalanced budget and therefore recommended continuing to shift surplus funds into Fund 46 to preserve flexibility and state-aid positioning.

"So the discussion is do we want to levy to the max, and set, and recommend the mill rate to be 3.3 with the levy that is presented to us," the Chair said. Patrick, a committee member, said he was "good with that" and agreed.

On expenditures, a committee member asked about a roughly $9,000 decline in special-education spending in fund 27; the Chair said the change was related to hiring and overall spend patterns. The Chair also noted language in the state budget that increases the intended special-education reimbursement from about 33% to 45%, though the district did not build the full uplift into its budget and said it would rely on actual reimbursements when they arrive.

"This would be some increased revenue, potentially, of about $80,000, at the end of the year," the Chair said, referring to higher special-education reimbursements if they are realized.

The committee agreed to move the recommendation to the full school board; the Chair said staff will notify the Department of Public Instruction (DPI) after the board acts so DPI can complete the official calculations.

The committee concluded its meeting without a formal recorded vote; the levy recommendation will be considered by the full board at a future meeting.