On June 21st, the Heartland Board of Education passed a resolution calling a special election for the purpose of requesting voter approval for local tax request authority that exceeds what is initially provided by newly enacted legislation (LB243).  The county elections commissioner has determined that the upcoming election will be a mail-in election - ballots will begin to be mailed out on July 24th to all registered voters that reside inside of the school district.  Ballots can be returned by mail or in-person at the courthouse, but all ballots must be received by 5 PM on Tuesday, August 15th.

In the past, the holding of an election would often be seen as a signal to voters and patrons of new projects, new spending, new plans, etc.  However, that is not the case in regards to this special election being called by the Heartland Board of Education.  Absolutely no new spending, plans, or commitments have been made by the Board regarding finances and upcoming tax requests since the Board concluded its financial planning and goal setting this past March.  What's reflected in the numbers related to this election is the same as what was understood to be required for the coming year when the Board concluded its long-term financial planning and goal setting in March.

What is new, however, is a series of restrictions that have been placed on all schools for the coming year - these restrictions result from new legislation passed late in this year's session of the Unicameral.  The new legislation put a series of new lids and restrictions in place on school boards limiting the authority that boards previously had to make decisions of this type for their local districts.  These lids and restrictions are based on formula calculations and a collection of audited, financial figures from the last two fiscal years.  Because of how the formula works, and because of the restrictions in the new law, the Board of Education cannot continue to move forward with the plans and commitments that it made earlier this year, and has begun to execute upon, without first seeking approval from the voters.

The Nutshell

The new legislation (LB243) provides all boards of education with what is called a certified tax authority amount - that amount is a formula calculation utilizing a variety of financial figures from the last two fiscal years.  To move forward with the plans that our Board committed to earlier this year, a tax request authority that is approximately $1.83 Million dollars larger than the certified figure that is provided by the state is required.  On its own, the Board is only capable of adding approximately $358,000 to that certified number - therefore the additional tax request authority that the Board requires (the $1.83 Million) must be approved by the voters.

One simple question that voters may have is, "Doesn't voting 'Yes' mean voting for a tax increase?"  The answer to that question is, yes, the tax request for this coming year (23-24) will be more than what the tax request was for the prior year (22-23).  However, the tax request accounted for in this proposition will not be bigger than what was expected / necessary resulting from the planning and goal setting completed by the Board this past March, before LB243 became the issue that it has now become.

Another simple question that voters may have is, "Will we have an election each year on this same issue?"  The answer to that question is no. If the ballot proposition passes this August, the Board will have the flexibility it needs going forward to manage the financial affairs of the district within the newly established limits of LB243. 

Below is a very brief overview of the plans that were already developed and put into place for next year, and for future years, by the Board of Education prior to the passage of LB243 - including the change of its operative date from January 1st to the coming 23-24 school year.

In the months of January, February, and March of 2023, the Heartland Board of Education engaged in a series of planning sessions relating to the short-term, medium-term, and long-term budgetary and financial planning of the district - this work is common for boards of education and our board has regularly engaged in such planning and goal-setting discussions in the past.

The results of those planning and goal setting discussions in January, February, and March allowed the Board of Education to map out a course for our budgeting and financial strategy for the next several years.  That strategy incorporated use of the Special Building Fund for completing our comprehensive construction project, our ongoing, general operations (including General Fund management), and our capital/building/infrastructure investments that involve funds such as the Special Building, Bond, and Depreciation Funds.

Special Building Fund

Most obvious among all of this is likely the planning involving the Special Building Fund and its connection to our current construction project.  The Board utilized a financing mechanism, known as lease-purchase financing, to borrow additional funds in order to fund the portions of the construction project that the bond issue alone could not provide enough money to pay for.  This required a short-term borrowing of approximately $5.5 Million to be repaid through the Special Building Fund over a 7-year period - requiring a new tax request of approximately $1.1 Million each year.  The coming 23-24 budget year was to be the year that repayment of that borrowing was to begin - with repayment to be made from tax collections in the Special Building Fund.  This approach was discussed with the community and patrons in January and February while the Board ultimately decided in early-March to make this borrowing commitment in the interests of fully completing the construction project.

General Fund

The new LB243 tax request lids will have some elements that the general public could easily find confusing as these lids consolidate both the General Fund and the Special Building Fund needs in each district - typically lid calculations for these funds would be kept separate from each other.  General Fund tax request growth for the coming year (which is accounted for in the amount proposed to the voters) can be attributed to a few basic areas - those are briefly listed below:

Personnel:  personnel costs for full and part-time staff that the district employs will increase by approximately $300,000 for next year.  This includes staff already employed by the district, as well as staffing that have been added for the coming school year to either reduce class sizes or to increase services to students.

Variable Operative Costs:  virtually all variable costs will grow from one year to the next - these costs include items ranging from fuel & utility costs to the costs of contracted student services, the costs of professional services, the costs of supplies, etc.  

Stabilizing Investments: intentionally increasing investments and planning towards continued financial-stability. Our district has a long track record of planning for long-term stability and financial health.  Over the next few years, we want to increase investments towards our Depreciation Fund (a savings fund of sorts for large, future capital expenditures) and also towards our general solvency ratio.