On the heels of a recent school mill rate hike, the Hanover School Division (HSD) finance board recently announced a $70,000 surplus closing out the 2014/15 school year. HSD currently carries an accumulated surplus of $3.25 million, equalling 3.98 percent of its annual operating expenditures.
“The province has guidelines that allow for school divisions to maintain a surplus of up to 4 percent,” says Kevin Heide, secretary-treasurer of HSD, “in order to cover expenditures that are not covered by provincial funding.”
Heide says it’s common for school divisions throughout the province to carry surpluses, which act as reserves for the unexpected, like school bus replacements in the event of an accident. He states that the province does not take into account surplus balances when determining their level of funding, instead using a formula based primarily on student counts and transportation needs.
“The year prior, we were [provincially] mandated to have a $500,000 deficit on our budget because we had too much of a surplus,” says HSD’s vice chair Rick Peters.
The March 2015 announcement of a tax mill rate increase was seen as necessary due to rising education costs, infrastructure growth, and the hiring of additional teachers as a result of the province’s K–3 Class Size Initiative.
As to whether the accumulated surplus will result in a mill rate reduction next spring, Randy Dueck, superintendent of HSD, says, “The HSD Board makes this decision annually as a part of the comprehensive budget process. The final decision will be made in March.”
