As COVID-19 leaves many businesses questioning their financial future, so too is the Sarasota County School District questioning its budget outlook.
Sarasota school officials are beginning to build the district’s spending plan for the 2020-21 fiscal year, but as COVID-19 continues to take its toll, leaders are left with questions.
With little else to go on, district financial leaders are looking to the 2008 recession to forecast the next five years.
“We don’t have any more knowledge than anyone else does, and we’re making predictions on what we think will happen going forward,” Jody Dumas, chief operations officer, said.
On April 21, district leaders proposed to the school board a $502 million operating budget for 2020-21, up slightly from the $481 million budget for the 2019-20 school year.
The plan anticipates a decrease in state funding with a 4% increase in local funding, largely linked to property tax revenue.
The property tax assessments that will account for 97% of the district’s local revenue for the 2020-21 school year are based on the Jan. 1 value of homes. Because that date was before the outbreak in the U.S., any real estate downturn due to COVID-19 will not affect what homeowners owe to the district in the next fiscal year.
However, the downturn could affect the 2021-22 budget depending on how long any downturn lasts. Leaders anticipate the 2021-22 school year will have the toughest budget.
Acting Superintendent and Chief Financial Officer Mitsi Corcoran advised the board to consider incremental cuts for the 2020-21 budget to avoid making larger cuts later.
The initial proposed spending plan presented April 21 did not include those cuts, though leaders said they would keep the board informed as financial impacts of COVID-19 become more clear.
Leaders project a 5% increase in the district’s millage rates in 2021, followed by a 4% increase in 2022. That would mark the first time in seven years the millage rate will increase, with increases projected until 2025.
Board members also discussed the possibility of completing an impact fee survey to increase the amount collected.
Impact fees are assessed on new developments to pay for their effect on county services because of increased demand.
“I think we need to do a study and look at them again,” School Board Member Jane Goodwin said. “I don’t think they’re high enough. I’d like to see where we are in current situation with the county because we are building a lot. There’s homes going up on every corner.”
Currently, the district’s impact fees for new building permits stand at $2,032 for single-family homes, $516 for multifamily homes and $188 for mobile homes, to be paid when the certificate of occupancy is issued.
The district has not reevaluated its impact fees since 2016, and the fee for single-family homes has stayed the same since 2004. The district uses money collected from the fees to pay for capital improvements.