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District finance presenter outlines three-year forecast and dependence on state aid
Summary
A district presenter walked the Central Square board through a three-year projection model showing revenue dependence on state aid, expenditure drivers (salaries and benefits), and sensitivity runs illustrating how varying state-aid scenarios would affect fund balance.
The district's financial presenter ran the board through a three-year planning model that compares actuals to budgets and projects forward under different assumptions for state aid, tax levy, and expenditures. He told the board that salaries and benefits account for about three-quarters of district spending and that state aid is the largest revenue swing factor; "this is the tool that's there" to test scenarios, he said.
Using the model, the presenter showed that a 3% state-aid increase produces different fund-balance trajectories than a 5% or 7% increase and emphasized sensitivity to the state formula. He noted assumptions included a 2% tax-levy baseline, an appropriated fund-balance scenario moving from $3,000,000 toward $1,500,000, and projections for health-insurance increases and retirement-system changes. "Remember, it's we're getting close to a $100,000,000 budget. 1% is 1000000 dollars," he said, urging attention to even small percentage changes in state aid.
