The Milford school district continues on a strong path financially due to conservative fiscal management combined with several unexpected increases in funding.
The biggest increase comes from the state over the next two years: we will receive an additional $1.1 million this year, and an additional $1.5 million the following year, for an ongoing increase of $2.6 million. This still does not bring us up to the amount we are “owed” per the new funding formula, but it is close – within about 6%. The reason for the shortfall is that districts that are seeing large cuts lobbied legislators to reduce those cuts. These are districts that are currently receiving more than their “fair share” per the formula, and have been for years. While they have known the reductions were coming, they did not plan for them, and are now facing large shortfalls in their budgets. You can read more about this situation here.
App. 60% of Milford’s funding comes from local monies, with another 30% from the state, and the remaining from federal funds and other sources. Our expenditures go mostly toward salaries and benefits, which makes sense since our “business” is to educate children, and the biggest resource needed to accomplish that is teachers. While it is considered fiscally responsible for 75% of a district’s spending to go to personnel, we are at 68%, indicating we are keeping a good handle on these expenses. In fact, our healthcare premium is DECREASING by 1.5% this coming year, which is unheard of in these days of double-digit annual premium increases. This is due to our participation in a health care consortium, as well as relatively low claims by our covered personnel.
This past year, Milford was able to save 6.4% of the allocated budget, or $4.1 million, which will offset additional required costs for the new elementary construction. Unfortunately, we are provided a certain budget by the state for new construction, no matter what the construction market is like. When we added on to the high school, we were able to save about this same amount, and we completed more work than expected. But what goes around, comes around; the construction market has now rallied, and costs are coming in higher than projected.
With the conservative fiscal management the district has demonstrated, plus the additional state funding coming our way, it will be several years before another operating levy is needed. The district had promised a minimum of three years from passage of the last levy in 2013; at this rate, we will be able to make it until 2018 (5 years) or possibly longer, depending on what happens in the economy. Remember, operating levies function largely as “inflation adjustment” for school districts: once a levy is passed, a district receives only that amount, with no adjustment for inflation. By running a levy every few years, districts are in effect making up for that additional they would receive if levy funds were permitted to grow with the economy.