Five Year Forecast: May 2012 Update

A routine update to the Five Year Forecast will be presented to the School Board by Treasurer Brian Wilson at Monday's meeting as well. Here is a copy for your inspection - I encourage you to read the several pages of assumptions which are included. In graphical form, the forecast looks like this:

Click to Enlarge

This forecast is not radically different than one presented last December, after passage of the levy, but there are a couple of things worth mentioning:

• This forecast assumes $400,000 of new revenue from casino taxes in FY13, and $1 million of casino revenue each year thereafter. As I said in a prior article, I'll believe that when we see it. Mr. Wilson is wisely using numbers that are about a third less than estimated by The Dispatch.
• Comp/Benefit costs for the years FY13-FY16 are about $1 million higher each year than was forecasted in December. I suspect this is because not quite as many teachers took the early retirement package as we had anticipated, as the other assumption are the same from the last forecast, but will ask Mr. Wilson. (update: Yes, Mr. Wilson confirms that this is the reason).
• The student enrollment (ADM) is projected to grow very slowly, from 15,605 this year to 15,919 in FY16, a net increase of 314 students, which is 240 less than the December forecast. This will depend on what happens with the housing market. Currently, apartment housing seems to be all the rage, such as the new mixed commercial/retail/apartment development being proposed for the site at the corner of Cemetery Rd and Britton Parkway.
  
  Many of us are concerned about the way apartments housing school age kids distort the funding model for our schools, because the school tax revenue generated per dwelling unit in an apartment complex is much less than that generated by the typical new single family home. We're watching closely the number of students which come from new apartment complexes, as it would have to be much lower than 0.8 students/dwelling, which has been our average for a long time, in order to make the economics work out. It doesn't help when the City of Hilliard uses a TIF to redirect money from the schools to infrastructure projects, as they did with the new Roberts Rd connector.
  
  Of course, the loss of revenue from a TIF can be offset with new commercial revenue. However, the practice has been to apply a TIF to new commercial property as well, as is likely to be the case with the commercial/retail portion of the Cemetery/Britton development.
  
  The point is that when we get new kids without new revenue, the rest of us have to bear the cost, which is one of the drivers for additional levies. If you live in the City of Hilliard, please tell your City Council members and the Mayor that you're not interested in subsidizing developers and new residents.
• Net of all the increases and decreases in various line items between the last forecast and this one, our projected net cash position at the end of FY16 is about $1 million less than was projected in December, which tells me that we should still be able to stay off the ballot with another levy request until 2014.

The need for serious, soul-searching conversations has not diminished. I don't assume that we can just continue spending money at this rate, and have the taxpayers of our district continue to cover it by increasing our taxes every 3 years or so. But to change the trajectory of our spending means changing things many of us hold very dear, and we aren't going to easily agree on what those things should be.

But we need to get started, and not leave it for the levy issue. I look forward to your respectful comments.