Marion schools: Tentative budget hits all-time high of $905M thanks to COVID relief funds

The Marion County School Board on Thursday approved the school district's tentative 2022-23 budget, a record spending plan of $905 million that is inflated by federal COVID-19 relief dollars.

The tentative budget is $158.4 million more than the final 2021-22 budget of $746.6 million. The spending plan is a tentative working budget that will be tweaked during three summer budget workshops. The final budget must be approved in September.

Superintendent of Schools Diane Gullett and her administrative team have been tweaking the budget for months, trying to ensure that all the top priority programs remain in place as the COVID-19 pandemic continues.

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The record $905.5 million spending plan for 2022-23 is $312 million more than the 2019-20 budget, largely due to nearly $200 million in special COVID-19 relief dollars that the district has received, or will receive, since March 2020, the beginning of the pandemic.

Other new money, beyond that coming to the district in the form of federal COVID-19 relief, comes from local and state. Those funds increased by a combined $49.3 million, according to the tentative budget released late Thursday.

Employee salaries have increased significantly because of Gov. Ron DeSantis' mandate to increase teacher salaries. From 2021-22 to 2022-23, employee salaries increased by $52.8 million, from $297.1 million to $349.9 million.

The district's funding is broken up in three primary categories: local, state and federal. Local funding increased by $22.7 million, state by $26.6 million and federal by $85.3 million. Another $23.8 million will be added to fund balance at the end 2022-23.

The increase is needed to offset the rising cost of doing business, such as fuel for buses, cost of electricity and other costs associated with inflation. Officials said that contracts for basic services have been rising steeply.

Theresa Boston-Ellis, the district's chief financial officer, said Marion County's record tax roll was $29.73 billion, a 21.4% increase from 2021-22. Though the millage rate will school tax millage rate will decrease in 2022-23, local funding will rise by $22.7 million.

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The $26.6 million in additional state funding was due to a $214.49 increase in per student funding and other extra money earmarked for specific uses and mandates.

Because the federal relief dollars must be used for specific programs, the best gauge of how much the Marion County Public Schools' budget increased year over year is to look at the operations budget.

That budget increase by $41.2 million, but much of that is eaten up in the state-mandated salary increases, as well as cost of doing business. Fuel, electricity and inflation hikes do add up, officials say.

Federal relief dollars bolster district finances

The district budget includes about $85 million more in revenue from federal COVID-19 relief money. In all the district has, or will receive through 2023-24 school year, $197.5 million in relief funds.

That extra $85 million in 2022-23 will help pay for intervention, teachers and other programs to aid student performance. The total $197.5 million, which can only be used for specific things, came from three relief programs:

• Coronavirus Aid, Relief, and Economic Security (CARES) Act, also known as ESSER I: $13.9 million, June 1, 2020 to Sept. 30, 2022; used for learning during school closures and for purchase of sanitation supplies and online schooling.

• Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA), also known as ESSER II: $56.6 million, from July 1, 2020 to Sept. 30, 2023; can be used to keep schools open safely and to restore/maintain high-quality leaning environment.

• American Rescue Plan, also known as ESSER III: $127.1 million, Dec. 17, 2021 to Sept. 30, 2024; Can be used to address mitigate learning loss through targeted interventions, afterschool, and summer programs.

At a previous Marion County work session, the district detailed its plan for the specialized federal rescue dollars. Much of the ESSER III dollars being use in 2022-23 will be used to target learning loss caused by the pandemic.

Reserve funding needed for future

The district routinely uses leftover funding, often called fund balance or reserves, to help supplement the next year’s budget. This year the district has set a fund balance of $71.2 million. The state requires the district to hold back 3%, or roughly $27 million, for emergencies.

The district is also holding back some revenue just in case the 1 mill tax referendum renewal is not renewed by voters. Without a voter renewal, it would expire on June 30, 2023. The board voted to add the renewal on the Nov. 8 general election ballot.

The district expects revenue generated from the 1 mill school tax will be $37 million in 2022-23. That is about $8.3 million more than in 2020-21 due to rising property values, which increased by more than 21%.

The referendum requires the district to use that money to bolster music and art programs, as well as physical education and libraries. The money also can be used to hire more teachers to meet state class-size caps and to bolster vocational programs.

Marion voters in 2018 approved the first renewal of the 1-mill tax for four years. Voters agreed that some of the money can be used for school security.

The $8.3 million in extra referendum funding for 2022-23 will be used to help offset some of the rising costs of school security, such as resource officers, equipment and campus fencing.

How will budget affect homeowners

The school millage rate was set at 6.505, which is 0.398 mills lower than the 2021-22 rate. Each mill equals $1 for every $1,000 of taxable property value.

That means taxpayers will pay $650.50 per $100,000 ($6.505 per $1,000) of taxable property value for 2022-23. That is $39.80 less per $100,000 in taxable value than in 2021-22. The comparison works only if the homes did not increase in property value.

Since property values are skyrocketing, some homeowner may see a slight increase in property taxes, though there is a 3% cap on property value increases in a given year for homes that have a homestead exemption.

Last year, an owner of $350,000 home paid $2,114.13 in school taxes after a $25,000 homestead exemption was applied. This year that same home, with a 3% increase in value, would be worth $360,500. The school taxes would then be $2,182.43, after the exemption is applied, or $68.30 more.

The school tax millage rate of 6.505 is broken down into several millage categories, all set by the state. They cannot be changed by the school board without taking a financial penalty.

The categories are: required local effort, discretionary, local capital improvement and referendum passed by voters.

The required local rate for 2021-22 was set at 3.250, which means the average property owner will pay $325 per every $100,000 in taxable property value.

The state also set the district’s discretionary millage at 0.748 mills. That adds another $74.80 per $100,000 of taxable property value, the same as 2019, 2020 and 2021.

Though called discretionary, districts around the state have limited jurisdiction to change those millage rates without being hit with a financial penalty.

There is an additional 1 mill for operations, which was first passed in 2014 and renewed by voters in 2018, that adds $100 per $100,000 of taxable property value to the bill.

The final component of the overall rate is called the local capital improvement millage, which is primarily used to pay off debt. It remained the same at 1.5 mills, or $150 per every $100,000 in taxable property value.

Contact Joe Callahan at 867-4113 or at joe.callahan@starbanner.com. Follow him on Twitter @JoeOcalaNews.

This article originally appeared on Ocala Star-Banner: Marion County schools budget hits record high due to COVID relief funds