Since the 2010/11 budget, the district’s tax rate has fallen by 29.5 cents.

NPS is expected to have a budget of $57.8 million for 2024–2025, with expenditures of $61.2 million.

But the focus on Monday was on options for funding that budget. The first option would set the levy at 86.52 cents per $100 of assessed value, down about 14 cents from last year. The second option would set the rate at 95.7 cents, down 6.7 cents from 2023-24. A third plan calls for any rate between the two proposed levy amounts.

The first option also includes a property tax demand of $32 million, $1.7 million less than last year. The second plan calls for a demand of $34.7 million, nearly $900,000 more than in 2023-24.

Erik Wilson, deputy director of economic services, who presented the budgets, said many of the numbers are estimates. Official figures will be available in late August, he said.

Wilson said the district’s general fund will be increased by $1.5 million, or 2.5%, to meet the need to fund the following services:

– Through negotiations with staff, this amount will be increased to $1.8 million.

– Added jobs totaling $727,500.

– MAPS tests, which are no longer paid for by the state and cost the district $36,000.

— Legal costs related to an allegedly faulty installation of a cooling system at Norfolk High School. Costs total $130,000.

— Increase in transportation costs of $130,000.

However, revenue is expected to increase by about $30,000 or 0.05%.

“This is because the state deducted our special education reimbursement from our 2024-25 property tax appropriation, reducing it from our 2023-24 amount by a significant amount (about $1.7 million),” said Superintendent Jami Jo Thompson. (The deduction was made because the district received more state aid than it had budgeted for.)

This leaves the NPS with a $3.4 million budget deficit, Thompson explained, which will require the district to dip into its cash reserves. The first budget proposal would deduct $3.4 million, while the second would deduct $800,000.

Board member Cindy Booth asked where budget cuts could be made. Thompson said that 83% of the budget is for personnel costs and therefore only minor budget adjustments are possible because these personnel costs are contractually fixed and cannot be changed.

“Most of our budget decisions for 2024-25 were made by the board months ago,” Thompson said, referring to the staff increases negotiated in November. “The real decision the board has to make now is how to fund that budget.”

District officials also explained the advantages and disadvantages of each budget approach:

— Under Option 1, which includes lower property taxes and fees, the district would reach all of its growth limits. A disadvantage is that the high reliance on cash reserves is not sustainable and would exacerbate the funding gap.

— Under Option 2, the withdrawal from the cash reserve to cover the deficit would be less than under Option 1. This would also close the funding gap. One disadvantage is that the Board would have to remove its cap on property taxes.

“Funding Option 3 can be any combination of Options 1 and 2,” Wilson said. “But we have to keep in mind that any option we choose outside of Option 1 will require 70 percent board approval to remove the levy limit and will require attendance at the (Madison County) joint public meeting.”

Under the first tax proposal, the owner of a home valued at $150,000 would have to pay $1,298 in school taxes. That would be a reduction in the NPS portion of that homeowner’s property tax bill by about $247, or about 15 percent.

Under the second plan, the owner of the same home would have to pay $1,436 in school taxes. That would be a reduction in school taxes of about $109, or 7% of the property tax.

However, if valuations increase, the new NPS levy could result in higher property taxes in both cases.

“I would add that the state has recommended that we keep our annual budget growth at about 3%,” Thompson said. “Here we are recommending 2.5%, so we are well below the required number.”

The 2024-25 budget is scheduled to be voted on Monday, September 23.