1. Lincoln County Schools Coffee Talk April 7, 2010

2. Program guidelines Coffee Talk is a moderated forum of questions and answers. All questions will be accepted in written form on the note cards provided.

3. Program guidelines This forum will address questions dealing ONLY state budget impact on Lincoln County Schools. –Issues surrounding specific incidents or items will be addressed in a separate venue by appointment only.

4. Program format All districts will present information about the state budget impact on local school district finances Attendants can ask general questions about the topic presented affecting ALL Lincoln County Schools Districts will then break out in individual sessions for presentations and questions and answers affecting your school district

5. Why are we here? To make the public aware of the current financial crisis facing the State of Missouri and ALL Lincoln County schools To present facts concerning the issues surrounding budgets and the economy To clarify current information and future budget implications

6. Impact of Budget Crisis

7. Initial state projections State information provided in February –Expect a 2% withholding from ALL schools –Elsberry$72,705 –Silex$29,071 –Troy$437,904 –Winfield$126,334

8. Updated March projections State added two more possible options Reduce $65 per student Revert to fiscal year 2006 funding levels for ALL schools

9. Latest FY 2010 State Withholdings Last week the senate voted (HB 2014) to protect hold harmless schools from the latest withholdings Hold Harmless is a designation based on a state calculation that guarantees that no school will get less funding on a new formula than they did on the previous formula This action means schools who are not Hold Harmless, which includes ALL Lincoln County Schools, will receive bigger state withholdings Withholdings Elsberry $156,659 Silex$59,874 Troy$1,258,358 Winfield$261,422

10. Current Reality for Lincoln County Schools Schools that ARE NOT Hold Harmless spend an average of $8,364 per student. Lincoln County Schools spend… Troy$6,938 Elsberry$7,268 Winfield$7,464 Silex$7,584

11. Impact of HB 2014 The average school that is NOT Hold Harmless could lose $92 per student The Lincoln County Schools could lose… Troy$205 per student Elsberry$193 per student Winfield$174 per student Silex$155 per student HOLD HARMLESS Schools stand to lose $0 per student

12. Sources of Revenue

13. State funding facts State revenue is based on a thriving economy –Income and sales taxes Fiscal Year 2010 (FY 10) Net individual income tax = -13.9% Net sales tax =- 6.6% Net corporate income tax = - 44.2%

14. State funding facts State General Revenue (FY10) fund is down Missouri’s Net General Revenue= - 12.7% - 12.7%

15. State funding facts State budget = May 14 –All local decisions associated with state funding may be delayed or anticipated due to this date

16. State funding facts $1.59 million All four districts stand to lose a total of $1.59 million in fiscal year revenue

17. State funding facts FY 2011 an expected $300-500 million in revenue shortfall FY 2011 – Only $218 million available in stimulus money to fund the shortfall

18. Major Tax Changes That Impacted Individual Income Tax ChangeForegone RevenueYear Increased personal exemption $155 million1999 State taxation of pensions $127 million 2007 Dependent deduction$68 million1998 Inheritance tax (federal law) $160 millionPhased out over four years in the early 2000’s Sources: Fiscal Note (HB 444), Moody 2001 Report James R. Moody & Associates 18

19. Major Foregone Sales Tax To GR Due To Exemptions or Earmarks Tax ExemptionForegone RevenuesYear Prescription drugs$190.3 million1980 Motor vehicle sales tax$110 million2005 to 2009 Food$210.4 million1997 Domestic utilities$192.4 million1980 Manufacturing sales tax$70 million1998 Internet sales??? James R. Moody & Associates 19

20. Funding reality 2009-2010 Versus 2010-2011

21. Local funding facts All of four districts have spent down reserves All four districts will have limited ability to spend down reserves in the coming years All four districts have government required expenditures –Special education, professional development, Title I, etc

22. Local funding facts All four districts have experienced a plateau or decrease in assessed value growth Assessed value directly impacts the amount of local dollars available for schools Assessed value (tax base) x tax rate = local dollars available for students

27. Funding follies Gambling money –1986 – gambling proceeds are funneled to Missouri schools Gambling proceeds were simply placed in the State General Revenue Gambling proceeds replaced original funding, which was funneled to other state entities Proposition A – Proceeds used as part of foundation formula No gaming revenues have actually increased school funding

28. Questions?