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Fall 2017 Conference Myrtle Beach SC Fall 2017 Conference Myrtle Beach SC

Fall 2017 Conference Myrtle Beach SC - PowerPoint Presentation

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Fall 2017 Conference Myrtle Beach SC - PPT Presentation

Outline SC Budget and Revenues Convergence 2017 Transportation and Pension Reform Economic and Budget Outlook Future Funding Possibilities Capital Improvement Funds Current and Future ID: 695592

school million general districts million school districts general fund state 2017 funding education district funds amp total tax year

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Slide1

Fall 2017 Conference

Myrtle Beach SCSlide2

Outline

SC Budget and Revenues

“Convergence 2017” - Transportation and Pension

ReformEconomic and Budget Outlook Future Funding PossibilitiesCapital Improvement Funds (Current and Future)

2Slide3

South Carolina’s Budget and Revenues

Appropriations & Revenues

3Slide4

FY

2017-18

Appropriation Sources

General Fund (Gross) $8,533,988,000Less Tax Relief Trust Fund ($583,649,169)Less Homestead Exemption Shortfall ($25,735,247)

General Fund (Net Available) $7,924,603,584

Federal Funds

$8,623,469,730

Other Funds

$10,855,586,746 Total $27,429,395,307***SC Total Personal Income in 2016 is $192.6 Billion. So, the State Budget represents about 14% of economic activity in SC.

4Slide5

FY 2017-18

Net General Fund Revenue Available

Sales Tax $3,041,207,000Individual Income Tax $4,295,400,000Corporation Income Tax $ 329,486,000Other Sources $ 868,270,000 TOTAL (Gross) $8,534,363,000

Less Tax Relief Trust Fund

($583,649,169)

Less Homestead Exemption Shortfall

($25,735,247) Total (Net Available) $7,924,603,584

5Slide6

FY 2017-18 General Fund, EIA and Capital Reserve Appropriations

6

“New Money”

Recurring $417 Million One-time $ 95 Million CRF $ 139 Million Total: $651 Million Statewide Appropriations: Pension Stabilization $118 Million

Employee Pay/Health/Dental/Pension $ 58 Million

Hurricane Matthew and Pinnacle Mountain $ 69 Million

Reserve Funds $ 22 Million

Local Govt. Fund

$ 10 Million

Subtotal: $

277MillionState Agency Appropriations: K12 Education $ 80 Million Health & Environment $ 149 Million Higher Education $ 26 Million Econ. Develop, Tourism & Natural Resources $ 83 Million All Other $ 36 Million Subtotal: $ 374 MillionSlide7

Why “Convergence?”

Retirement Funding Reform &

Transportation Funding Reform7Both bills were the culmination of years of work in the legislative arena.Slide8

H3516

,

Transportation Funding

8Slide9

Road Funding…and Tax Cuts

9Slide10

H3726

,

Pension Reform and Funding

10Slide11

11

Act 13 of 2017

SCRS & PORS FUNDING IMPACT

Expected new cash flow into SCRS and PORS from

employers

as a result of contribution increases required by Act 13 is $73.6 million for FY 2017-18, and an additional $36.8 million for each of the next 5 years.

EMPLOYER

IMPACT

July 1

Employer Rate Increase

General Fund

Local Government

Federal /Other Funds

Total All Funding Sources

Cumulative Total

2017

2.00%

$73.6

$67.4

$95.4

$236.4

$236.2

2018

1.00%

$36.8

$33.7

$47.7

$118.2

$354.6

2019

1.00%

$36.8

$33.7

$47.7

$118.2$472.820201.00%$36.8$33.7$47.7$118.2$591.020211.00%$36.8$33.7$47.7$118.2$709.220221.00%$36.8$33.7$47.7$118.2$827.4Total Additional Funds to System over 6 years$3,191.4

($ in millions)Slide12

12

PENSION FUNDING

IN THE

FY 2017-18 GENERAL APPROPRIATIONS ACT

The General Assembly allocated $154.8 million funding to cover a portion (if not all) of the 2% employer contribution rate increases in FY 2017-18 for every employer that participates in SCRS or PORS as follows:

The full 2% for:

General-funded

state and school district employees

EIA-funded employees (teachers & other school employees funded through the EIA)

1% for:

Federal-funded employees (including state agencies & colleges)

Other-funded

state and school district employees (also includes colleges)

Local entities (counties, municipalities, associations, hospitals, special purpose districts)Slide13

Economic

and

Budget Outlook

Let’s take a look at the state’s income growth and employment growth..

13Slide14
Slide15

15Slide16
Slide17

17Slide18

Show Me the Money

An Unofficial Guesstimate of FY18-19 Available Revenues

Recurring

General Fund (Unofficial): $320 Million*DOT “Transfer Back”: $50 MillionRoad Bill Tax Cuts (Year 1): ($36 Million)Net “New Money”: $334 MillionNon-RecuringFY17 Surplus: $0CRF:

$145 Million

Net “Non-Recurring”: $145 Million

*SFC staff estimate.

Official

Prelim. BEA estimate due mid-November 2017.

18Slide19

Lookout! More Budget Outlook…things to Watch

Impact of Federal Tax Reform on South Carolina Taxpayers…and the General Fund?

Phase-in of additional tax cuts from Roads Bill over multiple years.

Pension – Implementation of Phase 1 – increasing employer costs.Pension – Phase 2? A new plan for new workers?Abbeville Equity Lawsuit (and School Bus Funding)?College Scholarships and Funding Impact of SDE grade scale change.It’s a Disaster - - - Natural Disaster Recovery requirements?“Shaken, Not Stirred” - - - is 2018 finally the “Year of Bond”? (Bond Bill, that is)19Slide20
Slide21
Slide22
Slide23
Slide24

Original

Base

Student

CostAt District

Level: 6,000 students

in a

District

One superintendent

One fiscal officer

One director of planning for every 3,000 students

One assistant superintendent

One program consultant for every 750 pupils

Five secretaries

24Slide25

Original

Base

Student

CostAt

School Level

(Minimum size of

375

students):

One teacher for every 26 pupils

One principal

One assistant principal (if have more than 500 pupils)

One secretary

One attendance clerk

One librarian

One library aide (if have more than 500 pupils)

One guidance counselor (if have more than 500 pupils)

25Slide26

Original

Base

Student

CostOther

Items:

$7

per pupil for instructional supplies,

materials &

library

books

$10 per

staff

member

for in-service

education

Maintenance and Operational

Costs

Office

Support

Costs

26Slide27

Fiscal

Year

1981-82Total

Appropriations

to

Sc

hool

Districts

(Act

178

of

1981)

Distribution

to

Subdivisions: Aid

to

School Districts-

Education

Finance

Act

$

503,143,508

State

Employer

Contributions:

State Retirement

- Public School

Employees$ 50,121,169Group Life Insurance - Public School $ 2,148,050Social Security - Public School Employees$ 48,585,472Health Insurance - Public School Employees$ 22,627,040Total State Employer Contributions$123,481,73127Slide28

Fast forward to 2017…Slide29

29

EIA

1983-84

2017-18

 

 

%

Teacher Salaries & Fringes

$69,467,502

32%

School Building Aid

$66,738,136

31%

Remediation Services to Students

$60,500,000

28%

Improve Student Learning (Advanced Placement Exams, Modernize Vocational equipment, 5K, etc.)

$19,189,449

9%

Other

$1,370,773

1%

Total:

$217,265,860

 

 

%

Teacher Salaries & Fringes

$224,345,370

28%

SC Public Charter School District

$100,556,551

13%

Remediation Services to Students

$79,551,723

10%

4K Public Schools

$49,838,283

6%

EAA

$41,855,943

5%

Transportation

$41,198,813

5%

Office of First Steps

$29,336,227

4%

Instructional Materials

$20,922,839

3%

Other

$209,896,251

26%

Total:

$797,502,000

 Slide30
Slide31

House Education Reform Committee

Do away with the forty year old formula.

Goal is to have a new formula by 2020.

Main goal is to roll up as many lines as we can this year. We have had Superintendent Spearman present, CFO’s from several districts, Revenue and Fiscal Affairs, and Melanie Barton with the EOC. Ultimately we want the districts to be given the money and let them spend it as they see fit, but hold them accountable. Slide32
Slide33

Capital Improvement FundsSlide34

Abbeville Equity School Districts Capital Improvements Plan

Proviso

1A.82

in the Fiscal Year 2017-18 Appropriations ActFunding ($55.8 Million) is provided to eligible school districts by the Department of Education for school facility upgradesEligible districts are Plaintiff districts and those with greater than 80% povertyEligible Projects Include:Health and Safety UpgradesTechnology Upgrades inside school facilitiesUpgrades associated with career and technology education programsDeferred Maintenance needs described in the district’s capital improvement planSlide35

Abbeville Equity School Districts Capital Improvements Plan

Funding comes from:

EIA Capital Improvements fund (N/R) $ 4.8 Million

Revolving Student Loan Fund Transfer $16.0 MillionEIA Prior Year Cash Balance $35.0 MillionTOTAL $55.8 MillionSlide36

Abbeville Equity School Districts Capital Improvements Plan

Eligible Districts are:

ORANGEBURG 04

LAURENS 56

GREENWOOD 51

BARNWELL 45

DARLINGTON

SALUDA

CHESTER

LAURENS 55

CHESTERFIELD

SUMTER 01

UNION

RICHLAND 01

ANDERSON 03

CHEROKEE

LEXINGTON 03

DILLON 03

ABBEVILLE

FLORENCE 02

BAMBERG 01

FLORENCE 05

FLORENCE 01

BERKELEY

CLARENDON 03

LEXINGTON 02

ALLENDALE

CLARENDON 01

HAMPTON 02

LEE

BAMBERG 02

WILLIAMSBURG

FLORENCE 04

ORANGEBURG 03

JASPER MARION 10BARNWELL 19FAIRFIELD DILLON 04FLORENCE 03

MARLBORO

ORANGEBURG 05

CLARENDON 02

MCCORMICK

CALHOUN

COLLETON

LEXINGTON 04

DORCHESTER 04

BARNWELL 29

HAMPTON 01Slide37

SC Education School Facilities Act-

H.3343

Requires the State Department of Education to conduct a statewide facility assessment

Requires school districts to maintain Facilities and Maintenance plans and to submit these plans annually to SDE.SDE, through its Facilities Office, shall review the plans and annually submit to the State Board of Education for approval. The priority list of $200 million of facilities need ranked based on several priority factors which include: 1. Current condition of facilities 2. Population trends

3. Millage and fee levels

4. District financial health

5. Ability to pay bonded indebtedness

6. Ability to incur debt without the need of a

referendum

After the State Board approves the priority list, the list is submitted to the General Assembly and the governor’s office.Slide38

The General Assembly may adopt a proviso or joint resolution annually to authorize an amount of debt to be issued during the next fiscal year

.

The State Board would then submit an amount equal to the General Assembly’s authorized amount to

JBRC and SFAA for the issuance of G.O. (General Obligation) debt through the treasurer’s office.SDE would be responsible for verifying applications and district facility information and ensuring financial and program compliance.Financial assistance to districts could be in the form of grants, loans, or a fund of non-recurring appropriations for maintenance and smaller facility needs of the districts.The State Board together with the assistance from

SDE

would promulgate regulations as to the specifics of the program.Slide39

Abbeville Capital Improvement Fund (ACIF)

SCDE Process

Proviso 1A.82 requires SCDE to:

Establish an application processEstablish policies and proceduresPrioritize projects with greatest needRecommend listing of projects to the State Board of Education (SBE)Submit an annual report to the Governor and General Assembly based on prior year ACIF activitiesProviso 1A.82 requires the SBE to make an affirmative vote to award fundsSlide40

SCDE Considerations - ACIF

Timely distribution of funds

District summer renovation activities

Electronic application submissions only; multiple submission dates; minimize paper processesFeedback and guidance from eligible districtsFocus Group of finance officialsPriority for life safety, handicap accessibility, energy efficiency, technology upgrades inside school facilities, and deferred maintenanceTop three district-defined priorities

Compliance and Reporting

Adherence to 2017 District Facilities Assessments

Terms and Conditions – no new construction, plan review approvals, accounting and audit requirements

Reporting – expenditures and activities

Slide41

ACIF Requests for Funding

Available for Projects $55,828,859

Requested by Districts $133,780,920

SBE Approvals by Nov. 14 $45,230,262Yet to Allocate $10,598,597Slide42

ACIF Funded Projects

The majority of projects relate to health and safety upgrades and deferred maintenance

Within priority areas:Slide43

Next Steps

Leverage

State Energy Office

funds where feasibleSeek technical assistance from Office of School Facilities (OSF) when neededObtain Plan Review, Building and Fire Marshal Approvals if neededSubmit Quarterly Expenditure Reports to FinanceTrack Activities for inclusion in Annual Report to General AssemblyConclusion of Facility Assessments for some districtsQuestions:Delisa Clark, Director OSF, dclark@ed.sc.gov

Michael Thom, Director Finance,

mthom@ed.sc.gov