Business managers say they often hear the same refrain from taxpayers: Why are you increasing taxes if you have millions set aside?
It's an understandable argument, the officials said, but somewhat misguided.
The most common reasons business managers listed for having a fund balance:
---Setting aside money for future expenses: Districts can have assigned fund balance accounts for upcoming expenses such as building projects, pensions costs or technology costs. Rather than scrambling to come up with $2 million for a spike in pension costs, for example, many
districts prefer slowly building up savings for it.
---Bond ratings: Districts save money on bond interest by getting a better rating, and the ratings are tied in part to having a sizable fund balance. Dallastown business manager Donna Devlin said even the way a fund balance is being used can affect the district's rating -- if Dallastown dipped into its surplus year after year to balance its budget, banks see that as ineffective business practice.
---Protection against budget changes: School districts have to submit their budgets before the state finalizes its own budget, which means funding can change. Also, business managers said they expect the unexpected and don't want to go into a budget year with nothing to fall back on if there's a big maintenance repair or insurance claim or other cost spike.
"That'd be like having no savings account," Devlin said.
---Budgets are fluid: Budgets are based on estimates, and business managers say they like to be conservative. The hope is those conservative estimates lead to having some money left over rather than having to make cuts mid-school year. That leftover money gets put into the fund balance.
Central York's Brent Kessler notes the fund balance isn't a one-year total of money accumulated. It's the result of year-to-year fluctuations in the budget.
"It's years' worth of history. How did we get all that? Central York was created in 1955. Since 1955 through today, some years we have surplus, some years we have a deficit. It's an accumulated total balance," he said.
-- Reach Andrew Shaw at 505-5431 or email@example.com, or on Twitter @ydblogwork