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General Fund Revenue

Overview

The page below outlines the district revenue budget.  In simplest terms, it describes two primary revenue mechanisms:

  1. Flattening state revenue (apportionment), driven by the state funding model
  2. The importance of local levies as the primary source of funding to make up the state funding gap

Discussion

This page deals primarily with two key revenue sources: State funding & local levies.  While state funding is the district's largest revenue source, the Feb 2021 local levy vote approves the level of local tax support for the district and represents a crucial revenue source to enable the district to maintain service levels.

In order to understand the importance of the levy, it's important to understand the overall revenue curve and state funding sources.  The General Fund revenue curve is leveling off following a period of growth, driven primarily by flattening state revenues, while expenditures continue to rise at between 9 and 10 percent annually.  The levy represents the primary mechanism for supplemental local funding to support district operations.

Where does our money come from?

2020-21 General Fund Revenue Sources

What is our revenue projection?

Why are we projecting a flattening of revenues?

The revenue trend graph above shows a flattening of projected revenue in out-years, which lies at the heart of the budgeting challenge.  The primary reason for this projection is based in the state funding model, discussed below.

State Funding

Understanding state funding is critical to understanding why revenue growth is flattening, and the state funding model can be challenging to decipher. You can see the full model and formulas at the OSPI apportionment report page.  There is also an in-depth discussion of the state funding model included in the "Organization & Financing of Schools" manual (see Ch 5, pg 74).

The model's primary variable which affects Camas' revenue is "regionalization", a cost of living adjustment.  For Camas, that cost adjustment is decreasing annually, despite no corresponding actual change in cost of living relative to the rest of the state.  Regionalization decreases exert a downward force on the revenue formulas.  That means that state revenues, while already less than that required to operate the district, will be flattening while personnel costs continue to rise with cost of living.

The state funding model takes into account several factors:

  • Enrollment
  • Standard school staffing model (Prototypical model)
  • State funding rates (what the state will pay per funded position), with inflation adjustments (IPD)
  • Cost of living adjustment (Regionalization)

A simplified view of the overall funding model is:

(1) Enrollment /
(a) Prototypical Staff x

(2) Funding Rates x
(3) Regionalization
= State Funding

  1. Student enrollment is counted monthly and used as the initial input into that month's funding model calculations.
  2. Enrollment is used to calculate how many Full Time Equivalent (FTE) staff the district is funded for in various categories (teachers, counselors, etc)
  3. Standard funding & salary rates (adjusted for inflation) are set by the state for each funding category in the model.
  4. Those calculations are multiplied by "regionalization" to account for cost of living

Again, this is a simplified view of the model.  The actual funding model monthly report is over 60 pages of formulas, because the calculations are applied to a long list of line items; Certified Instructional Staff, Admin Staff, Maintenance, etc.  The model also sets amounts per student for things like supplies, textbooks, etc.  Combined, those categories total up to an annual apportionment amount which is then distributed monthly.

What is Regionalization and Why is it a Key Revenue Driver?

Cost of living and salaries across varying regions are taken into account. In theory, as cost of living increases, the model should account for cost of living annually via a "regionalization" factor.  Certain districts, however, are subject to an annual decrease in the regionalization factor despite no change in cost of living trends.  Camas is one of those districts, and this decrease in regionalization results in a slower rate of revenue growth than most other districts, despite rising salaries and cost of living.

Regionalization in the model is based upon the median single-family home value in and around the school district.  This means that higher cost of living areas get a "regionalization" multiplier applied to their funding calculations at adjust for this higher cost.  This factor was introduced in 2019-20, and for Camas was set at 1.12 (so a 12% addition to state revenue in the funding model), while surrounding areas in Clark County were set at 1.06.

Camas is among a group of 31 districts, however, which are subject to a "Regionalization Adjustment" annually beginning in 2020-21.  This adjustment reduces the regionalization factor by 1% annually (so 1.11 in 2020-21, 1.10 in 2021-22, etc) to a level of 1.09 in 2022-23, when it will be re-baselined.  Effectively, this reduces Camas' state revenue stream relative to both inflation and cost of living.

The graphic below shows the net effect of declining regionalization on revenue streams for Camas, vs. districts who have no annual decrease.  Over a period of three years, for districts with similar enrollment numbers, Camas will receive approximately $6M less in state funding.

While enrollment is an important component of the model and presents challenges in forecasting, particularly as a result of COVID, the graphic above illustrates an underlying force in the state funding model which serves to decrease potential state revenue growth in out-years.   Regionalization will be "re-baselined" in upcoming years for the period beyond 2023, and at this point there is little indication as to what the state will do (i.e. continue to decrease Camas below 1.09, hold steady, or increase).  For this reason, the 2020-21 budget and four-year projection take a conservative approach to the revenue budget, reinforcing the need to limit expenditures and ensure we maintain a healthy fund balance.  Additionally, this highlights the importance of levy approval in the spring of 2021 in order to fully fund our educational programs.

Local Funding - The Levy 

Virtually every school district utilizes a levy; a voter-approved source of local funding to make up gaps in state revenue sources.  As discussed above, state funding accounts for the majority of revenue, but is largely outside the control of the District.  Federal funding accounts for less than 2% of revenue, and local revenue (non-tax) for just under 4%.  This makes the levy the critical source of revenue.  Levy approval is the most important upcoming component of our budget planning, as without local support the district will face a significant budget shortfall (current local levies account for approximately $13M).  Find out more about Levies here.

 

Detailed Revenue Data

Use the charts below to explore district revenues. Click on expand arrows at bottom for full screen.