HOW IT WORKS #1: Salary Supplements & Sales Tax Revenues
The appropriation of an employee salary supplement at the Calcasieu Parish School Board’s November meeting brought about a discussion of sales tax revenues and an opportunity for further explanation of this process.
Parish-wide revenues from annual sales taxes for the Calcasieu Parish School Board are comprised of a 1¢ permanent tax and three ½¢ renewable taxes. Two of the ½¢ taxes are specifically dedicated to employee salary related expenditures. The growth in our local economy has recently had a positive impact on revenues collected from each of those taxes. While CPSB has certainly benefitted from the windfall created by industrial expansion, challenges arise in estimating how much of this growth will diminish once the construction is complete. CPSB has been hesitant to tie these potentially non-recurring revenues to permanent recurring expenditures. Data presented below outlines information about each of the sales taxes collected for CPSB.
1¢ Original Approval – 1968 (Permanent) – used “exclusively to supplement other revenues available to the School Board for the payment of salaries of teachers in the public elementary and secondary schools of the Parish and for the expenses of operating said schools, such operating expenses to include payment of salaries of other personnel employed by the School Board in addition to teachers, and for such other uses as are now or may be hereinafter provided for by law.”
Since over 80% of a school system’s budget is generally comprised of salaries and benefits, as a service organization, this tax call had mention of employee salaries, but also referred to expenses of operating schools and other uses.
½¢ Original Approval – 1987 (5 years) – Last renewed in 2012 (10 years) – used “to offset losses of revenues from the State of Louisiana, and/or supplementing other revenues available to the district.”
This tax was approved by the public at a time when Louisiana was struggling financially and state revenues to Calcasieu Parish education were in jeopardy. The tax was not limited to any expenditures. A 10-year history of the above two taxes totaling 1½ cents by fiscal year (July 1 to June 30) is listed below.
2017-2018 $120,488,919 2012-2013 $68,907,016
2016-2017 97,653,256 2011-2012 66,984,393
2015-2016 90,753,065 2010-2011 60,396,137
2014-2015 79,232.061 2009-2010 60,122,710
2013-2014 70,424,613 2008-2009 68,310,684
At its March 13, 2018 meeting, the Calcasieu Parish School Board authorized the use of available revenues along with other undedicated reserves on hand to fund $50 million in school maintenance and construction projects. These funds, allocated by pupil count in bonding districts, will help update school facilities and offset some of the projects that would have been dependent on future bond funds. The $50 million allocation was divided into two phases. The first $30 million in cash was transferred to a separate fund on April 17, 2018, to be tracked by expenditure, type and location. The remaining $20 million would be obtained from issuing debt with a 10-year payback from the General Fund line item budget, once the original $30 million is exhausted.
½¢ Original Approval – 1995 (10 years) – Last renewed in 2014 (10 years) – “used for the purpose of supplementing salaries of teachers and other employees of the Calcasieu Parish School Board.”
The tax has been tracked monthly since its inception and provided the following salary funding:
- 1995-1996 - $3,300 to all levels of teacher salary schedule and support raises of 10% (not less than $1200)
- 1996-1997 – raises to teacher salary schedule to create at least $350 between steps and $1500 between degree levels and one additional step to each support schedule
- 2015-2016 - $400 raise to teachers’ salary schedule as part of $4000 raise
After the first two years, the tax proceeds have also been used to provide numerous one-time salary supplements to active employees in identified years from 2002 through 2018. Revenues and expenditures for the last 10 years from this ½¢ sales tax are listed below.
Year Revenues Expenditures Annual Balance Accumulated Balance
2008-2009 $22,828,473 $22,848,767 ($20,294) $1,670,680
2009-2010 $20,069,956 $20,189,752 ($119,796) $1,550,884
2010-2011 $20,178,106 $20,189,752 ($11,646) $1,539,238
2011-2012 $22,357,167 $20,189,552 $2,167,415 $3,706,653
2012-2013 $22,994,935 $24,689,752 ($1,694,817) $2,011,836
2013-2014 $23,476,779 $22,494,184 $982,595 $2,994,431
2014-2015 $26,410,649 $25,980,128 $430,521 $3,424,952
2015-2016 $30,252,473 $29,119,209 $1,133,264 $4,558,216
2016-2017 $32,549,362 $23,601,183 $8,948,179 $13,506,395
2017-2018 $40,161,441 $38,692,645 $1,468,796 $14,975,191
The balance accumulated and not expended at June 30, 2018 for this tax was $14,975,191, as reflected in the CPSB financial report.
The last approved ½¢ sales tax was first approved in May, 2015, for a period of 10 years with the proceeds of the tax dedicated exclusively for supplementing the salaries and benefits of teachers and other employees of the Calcasieu Parish School Board. The tax was projected to generate $22,500,000 in its first full year, based on historical collections available. The tax has been used to fund the following (as accounted for in a separate fund in the system’s accounting structure):
- 2015-2016 - $4,000 raises to teachers’ salary schedule and all associated indexes and 10% increase to all support schedules with select schedule extensions
- 2016-2017 – Contribution to local one-time supplement of $1,450 to employees on the teachers’ salary schedule and $1,000 to all employees not based on the teachers’ schedule
- 2017-2018 – Contribution to benefits of one-time supplement of $2,850 to employees on the teachers’ salary schedule and $2,000 to all employees not based on the teachers’ schedule
Revenues and expenditures for the first three years of the tax are as follows:
Years Revenues Expenditures Annual Balance Accumulated Balance
2015-2016 $29,405,815 $18,182,422 $11,223,393 $11,223,393
2016-2017 $32,612,574 $26,344,461 $ 6,268,114 $17,491,507
2017-2018 $39,154,901 $23,325,779 $15,829,122 $33,320,629
The Calcasieu Parish School Board took action at its meeting on March 13, 2018, to set aside $20 million of the $33,320,629 balance from the 2015 sales tax for future salary and benefit related expenditures. Since sales taxes are volatile by nature and are even more unpredictable in our region, CPSB made the decision to reserve the funds until revenues stabilize both locally and from the state. Portions of remaining balances from the two 1/2¢ salary related sales taxes funded the 2018 October COMPASS payouts and the November one-time salary supplements.
It is always our goal and mission to ensure employees and the entire community stay informed of actions and decisions made by CPSB, especially when it pertains to tax funds and employee benefits and salaries. We value our employees and the job they do each day building foundations for the future.