The 2006 Legislative session has come to a close and the legislature has approved a school finance package that will phase in $541 million in three years for statewide K-12 education. The governor has signed the package, and now the package is in the hands of the Supreme Court.

As school districts across the state wait to see what the Court will do, the Arkansas City School District is in the process of planning the budget for the 2006-2007 school year. Last night at the USD 470 board of education meeting, Assistant Superintendent for Business and Operations J.K. Campbell told the board the district will receive an additional $1.27 million for 2006-2007, but the district will also experience increased expenditures and costs and decreasing federal funding.

USD 470 will see the following gains from Senate Bill 549:

Increase in Base State Aid Per Pupil: $199,426
Increase in at-risk weighting: $492,109
New density at-risk weighting: $234,790
Special education state aid: $196,184
High enrollment equalization: $102,168
At-risk non-proficient: $54,461
Total: $1,279,128

Of the new monies for the upcoming fiscal year, at-risk funds must be spent in certain designated areas only, although the state has loosened up on those restrictions, Campbell said. The additional money in special education aid flows through USD 470 and goes to the Cowley County Special Services Cooperative. Also, the at-risk non-proficient money must be spent on students who are not eligible for free or reduced priced lunches and are not proficient in reading or math on state assessments in 2004-2005.

The actual amount of new monies not earmarked for specific programs is a little more than $300,000. The remaining nearly $1 million must be spent in targeted areas.

The board already has approved additional teachers in the district, at a cost of $175,000. Salary adjustments for all personnel are estimated at $750,000, based on a 3 percent pay increase. Other areas of need include purchasing textbooks, at-risk programs, roof repairs at three buildings, mold removal at the middle school, bus lease purchase, vehicles, and increased insurance and fuel costs. The district also stands to lose more than $230,000 in federal funds and declining enrollment.

Campbell demonstrated how the district could gain revenue by increasing the percentage of the local option budget (LOB) and maintaining the current 1.4 mills of capital outlay. But Superintendent Dr. Ron Ballard pointed out that because USD 470 is considered a financially poor district, two-thirds of the LOB is paid for by the state, while the local taxpayer only foots one-third of the bill. Capital outlay is equalized and the local taxpayer pays 58 percent of the costs for that fund.

Dr. Ballard said he might recommend increasing the LOB and decreasing or eliminating the capital outlay millage since the state would pay the majority of the monies in LOB.

“We could give back some to the taxpayer through capital outlay,” he said.