Solanco School District 2017-18 General Fund Budget June 5, 2017 Final Proposed Final Budget: Solanco School Board District Central office 121 South Hess Street Quarryville, PA 17566

5 major items on ‘each side of the budget’ Revenues: L=Local---S=State Expenditures (L) Property Tax Assessed values Re-assessment Delinquent process (L) Earned Income Tax Demographics/Economy (S) Basic Education Funding (S) Special Education Funding (S) Pension/Transportation Funding Pension Rate Growing/slower rate Health Care Medical Trend RX Trend Salary Position review Special Education Compounding growth Key Support Functions

5 major items on ‘each side’--- drive the budget Revenues: L=Local=55.5% --- S=State = 32.2% Expenditures = 91.3% (L) Property Tax 42% (L) Earned Income Tax 13.5% (S) Basic Education 18.2% (S) Special Education 4% (S) Transportation/Pension 3.2% + 6.8% = 10% Pension 13.0% Health Care 9.0% Salary 39.8%-----61.8% top three Special Education 16.9% Facilities & Transportation 12.6%

Revenues

Property Tax Budget

Assessment growth—just over 6/10ths of 1%

Preparation/anticipation of re-assessment in evidence—second lowest growth in the last seven years---2018-19 start---2019-20 appeal impact

Earned income Tax: Audit History---Changing and volatile---2016-17; growth may be less than 1%

Earned Income Tax Monthly distributions---Down through 9 months

State Revenues – anyone’s best Guess-- Basic Education budgeted at the Governor’s budget level $100 M or 1.70% statewide Solanco at $10,122,596 or about 1.8% Special Education budgeted at the Governor’s level plus Act 16 funds $25 M or 2.28% statewide Solanco at $2.2 million Pension funding anticipated at state historical funding level Solanco at $3.7 million Biggest Threats Basic Ed and Special Ed---continued erosion of state Revenues falling below estimates Transportation--- Governor’s proposal includes a $50 million REDUCTION or 9.11% statewide Solanco would NOT fare well if that proposed section of the budget passes.

Expenditures

F5 Data: Pension: Mandated Spending per Student; Increase of $1,007 -- 2009 to 2015

Pension---RATE of increase finally slows—still growing

Employer Cost Rates—Growing, but at slower pace

Legislative Pension ‘fix’ in the news---it will be prospective only--- it will not address funding the long-term debt A dedicated funding stream may be a partial solution; a new tax? or more (increased rate/broader base) of something existing? ...or let it ride as is..... Much yet to be written about this story.

Health Care--- Over all; claims are higher in 2016-17 than the last several fiscal years inclusive of several larger claims ---- Both utilization and in claim severity Pharmacy utilization is up....the price of what we were paying (for Rx pricing) is down... specialty drugs for several specific claims were/are significant, and increase in Rx mix share as well Significant shift of employees in January 2017 to the High Deductible plan (Fall 2016 open enrollment) Employer lead and lag time on utilization---impact lags one or two years Employees see initial deposits and create future tax advantages for 1040 returns For reference....HC budget is approximately $5.3 million

Health Care Re-set: multiple approaches and programs

Payroll: Re-set; multiple approaches and actions

Salary Share trend---Similar to total state picture as well

Benefit Share Trend---Climb over time to Plateau

Combined: Total Compensation--- mirrored at the State level as well

Summary 2017-18 Budget Solanco School District General Fund 2017-18 -- Final Budget 5-Jun-17 Revenue Summary: Local Tax Rates Est Assessment 1,915,000,000 2015-16 Actual 2016-17 Current 2017-18 Proposed Proposed Increase Proposed Incr % Current Real Estate (Mills) 11.8040 12.4499 12.8109 0.3610 2.90% Current Earned Income 1.15% 0.0000 0.00% Current Real Estate Transfer Tax 1/2 of 1% Note: 2.9% increase keeps Solanco SD below the District's Act 1 Cap index for 2017-18 Property Tax revenues estimated from projected Net Taxable Assessment of : $ 1,915,000,000 Proposed Increase Per $100,000 Assessed Value: $ 36.10 = Increase (annual) for each $100,000 in assessed value Average Property Tax increase (Based on $146,200 Median Assessment) = $ 52.79 Revenue sources and % share: Revenues Sources $'s: 2013-14 Actual 2014-15 Actual 2015-16 Actual 2016-17 Budget Local 28,630,345 29,814,012 30,968,740 32,033,186 33,073,243 State 17,136,128 17,781,054 18,311,719 19,174,309 20,004,057 Federal 2,625,710 2,202,989 2,062,082 2,113,000 2,108,401 Other 3,571 67,791 7,885 405,000 605,000 Total Revenue: 48,395,754 49,865,846 51,350,426 53,725,495 55,790,700 Total Expenditures: 47,989,897 49,499,661 51,634,729 55,751,935 58,168,153 Varaince: Revenues over Expenditures 405,857 366,185 (284,303) (2,026,440) (2,377,452)

Revenue Sources 2017-18 Shares

2017-18 Budget Shares by Object

Budget Share: Special Education Function

Selected Support Functions---Approx. 17.5% of the budget

Selected Function Share: All Athletics and Extra-curricular programs including Musical, Plays, Band, Chorale, etc. (salaries, supplies, equipment).

Questions