District Budget and Finance Committee Report
Brandon Hentze, Co-Chair
SB318 is still in chambers but likely to move on soon. This bill will require districts to freeze tax levies across the state. The bill will cap and freeze the tax levy at the current dollar amount (NOT the current percentage) so that if there is an increase in future local revenue from taxation, the district will not be able to access these funds. Currently, the district has two options available to take action before the bill can become law. First, the district can restructure its debt to allow for alternative methods of payment along different timelines. This includes reclassifying some repayments for the debt structure. Second, the district can preemptively make adjustments to the tax rate in order to increase the current tax levy. With the advice of the financial advisers at Stifel, the district is going to implement option one to keep a true tax rate and not pass the expense on to taxpayers and voters. This effort should allow the district to negate most of the impact of the bill, if it becomes law.
The district is also continuing to work with Egyptian Trust to make changes to the insurance system. The district has two different options in this area as well. First, the district can withdraw from the Trust (it constitutes about 12.5% of the Trust) and begin to self-insure employees through other programs such as United Health Care. Second, the district can remain in the Trust with certain changes made to the Trust policies that will bring it better in line with the needs of the district. The Trust board will meet at the end of October to discuss proposed changes and vote to adopt any that are agreed upon. Based on how this meeting goes, the district will then weigh the benefits for employees under the new regulations against the benefits of moving toward self-insurance. At this time, everything is tentative as the Trust prepares their offer and the district considers the best option for employees.
Proud alumnus, union member, and educator in District #201 since 2006.
Dr. Hentze is the author of High Finance with Hentze, a monthly blog that provides news about District 201's current financial state.