Agenda - 05-08-2008- - Laserfiche WebLink

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increase of 4.1 percent (based on the most recent Consumer Price Index) in goods and services experienced by consumers including schools and County operations. ~- Sales Tax Revenues The Country's economy continues to slow, and in turn, consumers are not increasing their spending. Based on the April 2008 distribution report, sales tax collections between July 2007 and February 2008, the County has collected $12.5 million compared to the target of $13.5 million for this point in the year. Fiscal year 2008-09 marks the second year of the three year Medicaid Relief/Sales Tax Swap approved by the General Assembly in summer 2007. Per the legislation, over a three-year period, the State will take over Medicaid expenditures from counties. On the other hand, the State will keep proceeds from Article 39 sales tax to offset its new costs associated with Medicaid expenditures. In addition, the State plans to change a portion of the sales tax distribution formula from a per capita distribution to a point of sale distribution; thereby further reducing sales tax amounts that counties with smaller retail bases receive. The overall result is that while counties across the state will benefit from Medicaid expenditure reductions, they will also experience sales tax revenue reductions. Given the economic uncertainty that lies ahead in addition to the lower sales tax collections caused by the "Swap" and State changes in sales tax distribution, staff anticipates next year's sales tax revenues will be lower than the currently budgeted $23.2 million. Staff is working with representatives from the NC Association of County Commissioners to finalize how the legislation will affect the upcoming revenues. Funding Requests from Local Boards of Education Tonight's work session is the first opportunity the Board has had to discuss school districts budget requests that were presented by each School Board at the April 22, 2008 joint work session. In summary, Chapel Hill Carrboro City Schools Board of Education is requesting a total budget increase of $6,829,064 for the upcoming fiscal year while the Orange County Schools Board of Education is requesting an increase of $1,832,173 for the same period. Other information the Board may find helpful during tonight's discussions include: o Orange County's current year per pupil expenditure equals $3,069 o Based on March 2008 State certified student membership projections, both districts will have more students next year. Ghapel Hill Carrboro City Schools -increase of 323 students going from current budgeted number of 11,382 to 11,705 Orange County Schools -increase of 79 students going from currently budgeted number of 7,148 to 7,227 o If Commissioners were to fully fund the total budget increase requested by Chapel Hill Carrboro City Schools from the ad valorem tax, a 8.39 cent tax rate increase would be required and would result in a per pupil allocation of $3,569. ^ The Chapel Hill Carrboro City Schools increase would result in an additional $3,853,424 for Orange County Schools.