How Washington stacks up
I have done some research on Washington Community School District’s enrollment, solvency ratio, unspent balance and property tax rates over the last few years and how those compare with the state of Iowa.
The Washington CSD will be operating with a budget based on an enrollment of 1,740.20 on October 1, 2011. The previous year’s enrollment is the basis of the following year’s budget. In the state of Iowa, the smallest school district’s enrollment is 64 and the largest is 30,975 out of 351 districts for fiscal year 2012. The number of districts in the state continues to decline approximately five districts a year. The average size of a school district is 1,349. It is interesting to note that the Washington’s enrollment is close to the 1,747 that was reported in FY 2000, but below the peak of 1,801 in FY 2005. The district is anticipating steady or slightly increasing enrollment over the next few years. We do anticipate a drop beginning 2019.
The solvency ratio is an indicator that a school district uses to see how the district is doing in terms of debt to cash in the bank. An ideal solvency ratio is between 7-10 percent positive. When you view the solvency ratio for the school district, it is consistent with the misfortunes and economics of the state of Iowa. Back in Fiscal Year 2001, the district’s solvency ratio was 1 percent. The peak for the decade was in 2003 when the district topped 8 percent. The district had a negative solvency ratio from 2007-2010. The district rebounded to a 5 percent ratio in 2011 and we believe it will be higher in 2012.
The unspent balance is the difference between the authorized budget that a district has to spend and the actual expenses the district incurs. It is illegal for a district to spend more than they have the authority to spend which results in a negative unspent balance. It does happen to a few districts and causes a situation where the district has to go before the School Budget Review Committee and present a plan of how the district will correct the budgeting error. If a district has spent negative for three or more years, it could result in the state coming in and closing a school district. To date, that has only happened once but there are other districts in danger of this type of audit. Since 2000, the Washington Community School District has carried a negative balance two times, FY 2000, and FY 2008. For a district the size of Washington, an unspent balance of $4 million or more is close to the ideal. The district has been challenged in the last 10 years, but has turned this statistic around. The unspent balance for FY 2011 was $2.7 million. Still not where we want to be, but a long way from being negative just a few years ago.
Property Tax Rate
The property tax rate has a large variance throughout the state and a wide range. Property tax rates are determined by a variety of things. The most significant effects on property tax rates are valuations in the school district and new construction funded through property taxes. The valuations for the Washington School District continue to climb on an annual basis. The Washington Community School District does not have any property tax debt due to construction. As a result, the property tax levy for the upcoming school year is slated to be $15.73. Based on FY 2012 data, that would be below the state of Iowa average of $16.36. The lowest property tax rate for FY 2012 in Iowa was $8.34 and the highest was $27.68. For FY 2012, Washington was $16.76. This ranked the district as the 65th highest in the state. An over $1 a thousand reduction for FY 2013 should put the district considerably lower in overall rank. The tax levy of $15.73 will be the lowest tax rate for the district since FY 2009 when the tax rate was $15. The peak was FY 2011 when the rate was $17.46. Once again, much of the inflated tax rates were due to the state’s across-the-board cuts and the need to fund the cash deficit created by the cut in state funding.