Financial Update         

by Joe Smith, School Treasurer

                All Ohio school districts are required to submit a five-year forecast to the State of Ohio each fall, and a new forecast again before May 31. Tipp City Schools' five-year forecast may be viewed on the Ohio Department of Education website, www.ode.state.oh.us. The district is currently operating at the "20-mill floor," which is the lowest amount of millage allowed by state law.

                Revenue that was generated by the passage of the levies in May, 2009, is reflected in the forecast. Voters approved a renewal of the existing $2.7 million operating levy (no increase in taxes), and a new emergency operating levy for 2.61 mills, which generates $990,000 per year.  Beginning this year, 2010, the additional millage increased taxes on a $100,000 home by about $79 per year.   Both levies are scheduled to expire at the end of 2012.

                Recent sweeping changes in tangible personal property tax are creating concerns for school districts. Up until now, the State has indicated that schools will be "held harmless" from the loss of this tax, and schools will be reimbursed. Originally, in August of tax year 2011 the direct payment part of the reimbursement was to begin to be phased out until 2019 when reimbursement stops.  However, HB1 postponed this phase out of reimbursement until August of 2013 and will be phased out in the following six years and I have reflected that scenario in my forecast.

                We were fortunate enough to receive stimulus funds last year. Those funds are: the State Foundation and the Title 1 and IDEA federal programs for students who qualify. And we will be receiving that money again this year.  We are grateful and have been able to put it to good use. There are strict governmental controls to ensure that the stimulus dollars are used ONLY for the programs specified; in our case, Title 1 and IDEA.

                Our State Foundation payment last year (FY2010) was $7,240,782.13 we received $7,339,156.64 the previous Fiscal Year.  Difference was made up by the State Foundation Stimulus Fund.  We will receive the SFSF funding for the current FY2011 Fiscal Year which will conclude the 2 year program unless stimulus funding is extended by the President and the Legislature.

                We continue to seek federal, state and private grants in any possible area. Recently Tipp City Exempted Village Schools has been awarded Race to the Top (RttT) funds. The district will be receiving the minimum amount of $25,000 a year for four years. Tipp City Schools will also be receiving about $386,000 from the Education Jobs Fund (Ed Jobs) program. This program is a new federal program providing $10 billion nationally to states to save or create education jobs for the 2010]2011 and/or 2011]2012 school years.  Each state must allocate the funds to its local education agencies (LEAs), which in Ohio include traditional school districts and community schools, either through the statefs primary funding formula or on the basis of each LEAfs relative share of funds under Part A of Title I of the ESEA. The statefs primary funding formula will be used to allocate Ohiofs portion of the Ed Jobs program to more equitably allocate the funds across the state and provide a larger percentage of LEAs more Ed Jobs funding.

The district currently has a 2-mill permanent improvement levy in place. It was renewed for five years in November 2008, and will expire at the end of 2014.

Tipp City is recognized as one of the most desirable areas to live in the Miami Valley. If any single word defines the area economically, it would be stable. Wealth levels exceed regional and state averages; property values remain strong, yet still attractive to an average family. The schools provide an Excellent product, as measured on the Ohio Report Card, and we consider that a requirement in our stable and supportive community. Financial margins cycle from strong to thin, but have remained adequate, thanks to our excellent voter support.

                The school district was recently ranked the 20th lowest taxing district out of 35 in the Miami Valley region. Most districts with such low property tax profiles benefit from school district income taxes, but the Tipp City district does not use income tax as a funding source. The school district is providing an excellent product at a very efficient cost. The district was recently reevaluated by Moody's Investors Service and was upgraded to Aa2.

                The Board of Education and the school administration will diligently monitor the five-year forecast to insure future financial stability. Any decreases in state funding or unexpected increases in expenditures would have a profound effect on the projected forecast, and the district would be required to make funding/expenditure adjustments to maintain its stability.              

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