Dear Friend,

In my last two Mid-Week Updates, I talked to you about staff compensation and our district's growth. Today, I would like to talk to you about school finance. While we have had this discussion before, I want to stress again how all these topics are so tightly interconnected.

As North East employees, you must be able to talk to your community about the state of the district and help clarify misconceptions about the way school districts make and manage revenue. In an ideal world, the funding we receive would be sufficient for us to maintain the levels of quality expected by our community, and grow as our population and academic standards reach new heights every year. The current economic picture does not reflect this, however.

In the past, when home values rose, the district benefited from the extra property tax revenue that was generated. Today, the money we receive is capped at a set amount. When a homeowner pays an extra tax dollar because their property values rose, the state takes away a dollar in aid to the district. As you can imagine, it is very easy for taxpayers writing bigger checks for their property taxes to believe that our district is receiving a windfall of money. The reality is that the state is shifting the burden back to the local taxpayer to finance the daily operations of our public schools. In the meantime, our costs are only getting higher.

Districts receive more funds for increased attendance, but this system does not fully recognize the costs associated with growth. The only way for districts to raise significant additional funds is through a local tax rate election.

A local tax rate election, also called a rollback election, would be voted on by our taxpayers and grant us additional revenue above the state finance target per pupil. It is something we will have to seriously consider in the near future if we continue offering programs and services at our current standard.

To meet the higher levels of academic standards placed before us, the district must also reward and retain the best staff. This calls for competitive salaries. It is also why the board agreed that our retention incentive should be kept, even if it was necessary to reduce the supplement by a small amount.

Balancing all this means our austerity plan is more important than ever. Last year, we saved more than $2 million dollars in spending. This year, we presented a balanced budget. Next year, we will look to build our fund balance as much as possible knowing how unstable future state funding may become. Any steps we can take to improve our financial health and communicate that plan to the community we serve will benefit us all. I appreciate your partnership in this endeavor.

Have a great week.

Sincerely,

Richard A. Middleton