Creston Community School District’s Board of Education unanimously approved the fiscal year 2018 (FY18) budget during a special meeting Monday night.
Included in the FY18 budget is an Instructional Support Levy. Previously, CCSD was one of just six school districts in the state of Iowa not using some form of an Instructional Support Levy.
ISL allows a school district to increase its spending authority by a maximum of 10 percent.
The FY18 budget approved by the board Monday night includes an ISL of 8 percent, which includes a .59277 property tax and a .04 income surtax.
By adopting an ISL, the board replaced a portion of the cash reserve levy with the ISL.
“It increases (spending authority) by that total ISL of $570,478,” said CCSD Business Manager Billie Jo Greene. “We didn’t have that spending authority if we’d have kept it on the cash reserve.”
“First and foremost, we have to have strong schools for these kids or they don’t have a chance,” CCSD Superintendent Steve McDermott said. “A lot of them, we’re their only chance. The other part is for our community to be vibrant and grow and be attractive to people, we have to have a strong school system. There’s some cold, hard business benefit to having a strong school in your community. Somehow, you have to support that. On the other hand, we’re trying to do the best we can to provide the best school we can within our means. The community can only afford so much.”
The total property tax rate for the former Creston School District for FY18 is 16.51839. In order to generate the same number of dollars without accompanying spending authority, the total property tax rate would have had to jump to 17.21839 – or about 70 cents per thousand.
The total property tax rate for the former Prescott School District is 13.54493 for FY18. The FY18 budget is the second year in a four-year consolidation process, whereby at the end of those four years, the general fund levy for former Prescott School District will match that of the former Creston School District.
The only difference between the two former districts at the end of the four-year process is former Prescott School District will not absorb former Creston School District’s debt service.
Instead, total property tax rate for the former Creston School District is only raised from 16.48780 in FY17 to 16.51839 in FY18.
The .59277 property tax in the ISL will generate $265,911, while the .04 income surtax will generate $304,567.
The income surtax refers to a small percentage tax applied to the total Iowa income tax owed by a taxpayer. It is not a tax to a person’s total income.
“The discussions I’ve had with people, nobody likes taxes to go up,” said Dr. Brad James, board president. “But in all areas out of the community lately, there hasn’t been the pushback to this I thought there might be. I think one of the things that made people OK, to some extent, is the fact we’re making cuts. They see that. I certainly don’t like seeing taxes go up, but by having it be a combination of it being property tax and income surtax – it’s not based on your total income, which scared a lot of people early on.
“It’s a small amount. When you do that math and you spread it out throughout the year, divide it by 52 per week, paying for these students and these kiddos is worth it every day.”
The ISL is determined on a year-to-year basis, so both the property tax rate and the income surtax associated with the ISL could be reworked for the FY19 budget.
“Of course, the budget is reviewed and set one year at a time,” McDermott said. “This happens annually. In terms of the Instructional Support Levy being something new, we can see how it functions for us this year and then make decisions in the spring accordingly.”
McDermott noted another big part of the budget process has been making cuts in the repeating budget.
The CCSD board has approved approximately $700,000 in cuts from the FY17 and FY18 budgets. McDermott said he believes more cuts will be needed in the future, as well.