Thursday, December 16, 2010

NASD Budget: Revenues and Expenditures

The proposed 2011-2012 NASD budget calls for $68.8M in spending – a $30.8 million dollar increase over the total budget ten years ago (and that budget was up $6M from three years previous 1998-99).

Read this, absorb it, think about it, let it sink in: Next year we will spend $20 million more dollars to educate the same number of students as we did six/seven years ago.

The Morning Call reported late last night (read the post here) that it was noted at the NASD school board meeting that NASD previously had the highest tax rate in Northampton County, 8 out of 8 districts, but now is only 5th.

Have we gotten better? I don’t think so. $30,000,000 more seems like a lot of money, and $20,000,000 more to educate the same number of students is unreal. Why did we have to spend that much more? Over the years I’ve heard the following:

1.       Growing enrollment

2.       Special Education

3.       Lack of State funding

4.       Inflation

There are many other reasons I’ve thought of including:

1.       Debt Service (due to construction)

2.       Additional Staffing

3.       Additional Administration

4.       Transportation

5.       Grade Configuration/Building Use

Many of these are dependent on one another. Another area I don’t hear much of, is how much additional revenue the NASD has received due to commercial development. Today I’m going to look at general expenditures and revenues.

In 2002-03 (the oldest I have available to me) the assessed valuation of properties in the NASD was $673,167,100, which yielded $24,375,381 and the collection rate was 97%. This year (2010-11) we are looking at $930,101,900, yielding $43,621,779, with a collection rate of 93%.

Revenue

Assessed Valuation

The assessed value of properties has increased $277,643,700 over ten years. The NASD is anticipating a drop in 2011-12 of $13,232,123.

Unfortunately, the budget documents don’t delineate revenue from residential vs. commercial properties, but it can be suggested that a fair amount of the increase has come from properties developed along route 248 in Lower Nazareth Township over the past several years.

The increase in assessed value (coupled with tax increases) has yielded an additional $19.25M in tax revenue for the district in an eight year span (2002-03 through 2010-11), unfortunately our expenses have climbed by $25.15M during that same period of time.

This increase could have resulted in relief for tax payers had spending been controlled, but it outpaced revenues by nearly $6M.

Collection Rate

The collection rate was very consistent at 97% from 2002 through 2006-2007 school year. Since then our annual collection rates have been 96%, 95%, 95%, and 93%, the latest being the 2010-2011 school year projection. This would be based on those who pay upfront, coupled with those who made the first two payments on the installment plan.

Unfortunately, I see a continuation of this trend for this year and at least the next two due to the economy and real-estate markets.

What is the impact? This year’s 93% collection rate will result in a loss of $3M. Despite the downward trend, the NASD has budgeted for an increase next year from 92.96% to 95.25%. I wouldn’t be surprised if it is really 90-92%.

Expenditures

In 2001-2002 our total expenditures were $38,015,009 with 4151 students and 457 staff of which 269 were teachers and 20 administrators.

In 2011-2012 our total expenditures will be $68,834,445 with 4628 students and 562 staff of which 342 were teachers and 27 administrators.

The increases are  $30,819,436 in expenditures, 477 students, 105 staff of which there were 73 more teachers and 7 more administrators.

On a percentage basis our expenditures increased 81%, student enrollment 12%, staff 4%, teachers 27%, and administrators 35% during this ten year period.

As a result, we should consider the following line items: regular education ($16.5M to $27.8M, 69% increase), special education ($3.2M to $8M, 150% increase), administration ($2.1M to $3.8M, 81% increase), and pupil personnel ($1.1M to $1.6M, 50% increase).

 

Some additional areas of interest are Debt ($3.6M to $8.2M, 127% increase), Operations & Maintenance ($3.3M to $7M, 112% increase), and Transportation ($2.2M to $3.7M, 68% increase).

These figures address a ten year span and they are eye-opening. More surprising is that our enrollment is projected to decrease for the fourth year in a row, down to 4628. This enrollment figure is within 50 students of 2004-05 and 75 students of 2005-06 school years’ enrollment.

The cost per student in 2004-05 was $10,348, in 05-06 it was $10,673, and in 2011-12 it is going to be $15,169.

Future posts will explore each of the areas outlined in this post in an attempt to understand why it costs so much more today to educate the same number of students we did 6-7 years ago.

Posted via email from Ross Nunamaker

6 comments:

Anonymous said...

What surprises me is how school districts completely defy the logic of the rest of the commercial world.

With the down economy, corporations have had to figure out how to do more with less. They streamlined their businesses, and yes, cut positions.

I know of few people in the commercial world that have enjoyed the pay increases teachers and administrators have enjoyed in NASD, AT THE EXPENSE OF THE TAXPAYER.

I look at the current staffing levels you indicated:

562 Staff which inlcudes
-342 teachers
-27 Administrators

Which means there are 193 people that fall into the "other" category, which equates to about 32 people per school.

Now I know that some of those are district maintenance that span all the schools, but, when does the administration and the board open their eyes and realize that they are bleeding the public dry?

Simple answer is that while they may all have an education background, NONE of them know how to run a business.

It is time the district learns to exercise a little fiscal responsibility and learn how to spend within the means of the taxpaying public.

justc said...

Keeping costs under control is a great idea, but schools should not be run like businesses. You need to get a majority on the board who want to control spending. Until then nothing will happen.

Clem said...

1:19 -

What is just as surprising is that you are surprised. They do it every year, and no one can stop them.

They do it because the courts and police will enforce their right to be thieves. Courts and police, as you know, are their involuntarily taxpayer supported brethren. They make the rules, they have the legal right to make you do what they want. They will destroy a year of your kids' lives if that is what it takes to get what they want. That is how people who would have trouble getting a job at McDonald's can make six figures a year.

But, this is not new. Not sure how anyone can be surprised. Pissed off? Sure. But not surprised.

Anonymous said...

Justc, I have to disagree with you. In a school, their product is education. They have to figure out how to deliver a better product in a cost effective manner.

We keep hearing the argument that we need to spend more to provide a better education. This is complete BS. If you follow the PSSA scores, ours continue to drop, yet we keep paying more. Per NOCs data, we are paying quite a bit more than we did a number of years ago for the same amount of students, yet, scores have not improved.

If administrators were able to fire non productive teachers, if they were able to be agile in how they did things, and if they were able to think outside of the box, we might actually see improvements in our education system.

Clem, you are right, I shouldn't be surprised. The Good Ole Boy network is going to do what they want regardless of what we the taxpayers want. I am convinced that even if every taxpayer in the district showed up at board meetings, they would still ignore us.

Wayne said...

Hasn't it been proven that there is no relationship between spending and educational results? Parochial schools, homeschoolers, cyberschools... don't they all do it considerably cheaper?
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Anon said:
"...I am convinced that even if every taxpayer in the district showed up at board meetings, they would still ignore us."
---------------------------
I understand the defeatist attitude (from past experience) but I don't agree with it. It's not a given.

People have starting to show up at these general school board meetings and also to the budget meetings. I think the very fact that people are taking an interest at this early of a date has the board's attention. Normally people don't show up at meetings until everything has been already decided. From some of the reactions of individual board members it doesn't appear to be set in stone.

NewsOverCoffee said...

Two points, First, I don't buy the argument that you can't run a school like a business. How is Moravian Academy run? Like a business. How are colleges run? Like a business.

The question is how best to run a school like a business?

Second, there is a group forming, not sure if it will happen or what shape it will take, but the last thing the board and admin will want is an anti-tax group organized and active within the district.

If they don't start taking action, and the group mobilizes, they won't have to listen, because they will be replaced.