During the budget process, surplus is always a hot topic. So I thought that I would explain why I think the WW-P school district has too much and should use it for tax relief. Several years ago, the state changed the rules to require that school district could hold no more than 2% of their annual expenses as surplus. The intent was to force districts to give excess amounts back to the taxpayers.
District financial statements show that at June, 2010, the fund balance was $20,655,876. It is the taxes that have been collected over many years less the amounts spent. About $6.2 million of this balance was due to less spending than tax revenues in the 2009-’10 fiscal year. The balance was carried over from the prior year.
If the district can put names against this fund balance, then it is not surplus and does not have to be returned. So let the games begin. The district had already made a commitment to tax relief for 2010-’11 of $5,776,058. The proposed budget includes tax relief of $3,190,377 in 2011-’12. So taxpayers will get back $9 million of the $20 million fund balance. What happens to the rest?
There are $904,257 of encumbrances. These are purchase orders or capital project commitments that were outstanding at June 2010. These expenditures get added to the 2010-’11 budget expenditures. Then the district has created reserves in case of unexpected events. These balances are a $503,570 maintenance reserve and a $999,033 emergency reserve. The remaining item is $6,318,301 in capital reserve. That leaves a surplus of $2,964,280.
When the district talks about the need for a cushion or working capital, they only mention the small surplus number and bemoan how that is less than a single payroll or would only cover a week or two of expenditures if something happened to revenue flow. So they ignore that entire $11 million of reserves would be available in a true emergency.
Finally, the discussion has only been about the general fund. The district has been silent about surplus in other funds. There is a significant surplus in the community education enterprise fund. This is the accumulated profit over many years. I have asked the district about this surplus but have never received an answer. As tax rates increase by 4.8 and 6.6 percent, why can’t this money be used for relief?
I believe that there are excess reserves in the general fund and unassigned surplus in the enterprise fund that should be used for tax relief. Unfortunately, the district is uninterested in giving this money back to the taxpayers. Please join me in demanding real tax relief by voting against the bloated budget.
Quentin Walsh, CPA
Petty Road, Plainsboro
For more opiniions on this subject, see the online report on page 3, and visit www.wwpinfo.com.
