The school district will collect an additional $16.7 million in property tax revenue; will have $94 million more in the budget
Members of the Hernando County School District (HCSD) Board of Trustees voted 5 to 0 at the September 6, 2022 meeting to approve the proposed budget for the 2022-23 school year. The total mileage rate adopted for the 2022-2023 fiscal year is 6.5250. There was no change in rates from fiscal year 2021-22 other than the state-controlled Required Local Effort (LRE) which fell 7.14%. As the total mileage rate decreases by .2520 due to the lower LRE, ratepayers are likely to see increased tax payments as the district expects to collect an additional $16.7 million in tax revenue during the 2022-2023 financial year. The total mileage rate required to collect the same amount of taxes as for the 2021-2022 fiscal year is 5.396 (also known as the rollback rate). The adopted mileage of 6.5250 is more than a thousandth higher than the rate of recoil.
Joyce McIntyre, Director of Finance and Director of Budget Kendra Sittig, presented the final budget proposal, showing an overall projected increase in all funds of $94,414,200 over the previous school year. The total budget, including prior year fund balances and transfers, is $474,908,515.
Federally funded CARES (Coronavirus Aid, Relief, and Economic Security) Act funds will add $53,665,206 to HCSD revenue. These funds are specifically to be used for salaries and benefits ($11,899,255), purchased services ($5,429,108), energy ($185,000), materials and supplies ($6,351,901), capital expenditures ($29,143,108) and other unspecified expenditures ($656,833).
The recent rate increase of 1.00 million miles also added revenue to this school year’s budget. The tax increase will provide the school board with an additional $14,860,884 to use for the construction, maintenance and repair of school facilities.
In addition, each school district in Florida is subject to a Required Local Effort (RLE) contribution, which is the amount required by state law to cover the cost of the Florida Education Funding Program ( FEFP). FEFP funds are intended for operating costs. McIntyre reported: “On July 19, 2022, the Education Commissioner certified the Required Local Effort (RLE) mileage rate of 3.277. This rate must be levied by the school board to generate the RLS. The RLE has decreased by 7.14% compared to the 2021-22 school year.
Hernando County’s estimated tax roll increased 25.59% from the prior year to more than $15 billion ($15,480,087,369), translating into total tax revenue for the school district of $96,967,267. This is an increase of $16,776,760 in tax revenue from fiscal year 2021-22.
A school district analysis of homes of varying values shows that school taxes collected will decline in tax year 2022. The slide does not explain that the drop in school taxes would only occur if homes had no not increased in value at all. Given that there was a $3 billion increase in assessed values, that would not be the case for the average homeowner.
This illustrates the importance of establishing what the reduction rate is so that the taxpayer can understand if their tax bill is likely to increase or decrease. The reduction rate is the mileage rate where the same amount of tax revenue would be collected as the previous year.
Sittig presented all of the funds that make up the entire school district budget, which includes six district funds. These funds are allocated according to standards established by the Governmental Accounting Standards Board.
The general fund is the school district’s operating budget, derived from federal ($899,000) and state ($133,473,607) funds and local ad-valorem taxes (property: $59,815,057 and local $2,332 $587). The recent mill 1 generates $14,860,884 for the general fund.
The federal source of revenue comes from the Hernando County Military ROTC (Reserve Officer Training Corps) and Medicaid reimbursements. The source of state revenue is the previously mentioned FEFP calculation and was received by the district in July. It also includes Workforce Development Program revenue, state license taxes, and Southwest Florida Water Management District (SWFWMD) grants.
The largest general fund allocation is for salaries and benefits, which total $168,071,458, or 79.36% of the fund. $1,261,457 is transferred to a new bus rental payment.
The district began the year with an opening general fund balance of $42,802,188 and is expected to end the school year with a balance of $43,444,603. Closing balances also have unusable portions and funds that are restricted or allocated to predetermined items. The unallocated portion entering the 2022-23 school year is $17,872,967, or 9.12%.
Sittig credited state and federal grant support for the district starting a new year in the dark. “In 2021, the Florida Department of Education held districts harmless when it comes to FTE (full-time enrollment) losses. This would have resulted in a substantial decrease in our funding. Revenue from the CARES grant allowed us to pay for expenses that in any other year would have been paid for with General Fund dollars. It is important that we continue to preserve our fund balances so that we do not have a detrimental effect when regular operations resume. »
Capital expenditure funds are used for the construction and acquisition of capital equipment and facilities. Notable expenditures from this fund for 2022-23 are Wilton Simpson Technical College ($8,444,787) and the Nature Coast Technical High School Criminal Justice Expansion ($200,000). Revenue for this fund comes from ad valorem taxes, half-cent sales tax proceeds, interest revenue and impact fees.
The Food Service is a self-sustaining fund with revenue generated from federal student meal reimbursement, USDA-provided commodities, and limited amount state supplements required to match federal subsidies, cash sales and payments from agencies providing catering services.
Salaries and benefits total $6,163,002 of the budget of $23,581,131. Materials and supplies are allocated at $8,566,000. This fund has increased by $131,152. This will be the fifth year that schools in the Hernando District will participate in the Community Eligibility Provision (CEP), which provides students with access to free school meals. Sittig said the budget for this program is $17,020,000.
Federal grants, which include Title I, Title II, Title III, Title IV, Title VIII, Carl Perkins and others including adult education, total $16,754,903. Sittig said when the DOE certifies the “incremental” grant of an estimated $4,000,000, it will be amended in the budget.
Proposed final mileage rates 2022-2023