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Parkway Board Approves 2006-07 Budget; Revenues Expected to Fall Short of Expenditures by $2 Million

The Parkway Board of Education unanimously approved the districts $186 million proposed budget for the 2006-07 fiscal year at its June 21 meeting. The budget approval follows several months of open discussion, evaluation and planning. With inflation expected to run between 3.0 and 3.75 percent next year and in spite of continuing cost containment measures to keep expense increases to a minimum, overall operating costs are expected to exceed revenues by approximately $2.0 million in 2006-07. The district cut more than $4 million from the annual budget in 2002 and another $2.5 million in 2005. Those reductions have been continued each year. In 2006-07, operating revenues (excluding debt service, student activities and bond funds) are projected to increase to $184.09 million (+1.44 percent) while operating expenditures will increase to $186.09 million (+1.3 percent). Over the past five years, revenues have increased approximately 1.25 percent annually as compared to inflation over that same period of 2.73 percent annually. Revenues from the 2004 bond issue continue to fund facility and technology capital replacement needs. This is the fifth time over the past seven years in which revenues have fallen short of expenditures, requiring the district to use its operating cash account to cover the difference. Although as of June 30, 2007, operating cash account balances are projected to be within the levels required by board policy, those balances are expected to decline significantly in following years. Operating revenues in 2006-07 will require close monitoring as a major ($20 million) business property assessment appeal is pending before the State Tax Commission. A negative ruling could impact Parkway's short-term financial operations. For more information about Parkways 2006-07 budget, please contact Parkway's Chief Financial Officer Mark Stockwell at 314-415-8005. The new budget is available on the Parkway web site at http://www.pkwy.k12.mo.us/finance/index.cfm.