LINN — A week after voters approved a 50-cent operating levy increase, the Linn R-2 school board began putting that additional revenue to work. At their meeting on Tuesday, Aug. 11, board members unanimously approved a new certified salary schedule that raises the district’s base teacher salary to $40,000.

The move was more aggressive than the district had originally anticipated. Earlier planning called for maintaining the existing salary schedule at the start of the school year and potentially implementing a prorated increase during the second semester, when revenue from the new levy begins to arrive.

Instead, the board voted 7-0 to move immediately to the $40,000 base, with Superintendent Bob James telling members that teachers will see the increase beginning with their September paychecks.

“I think the community has spoken loud and clear,” said board member Alfred Brandt in making the motion. “I think they want to see us use it to pay teachers, and I just think it’s the right thing to do at the right time.”

James agreed. “I think it proves what we said we were going to do,” he said. “It’s tough to get a tighter timeline than what we’re doing, and I’m pretty happy about it.”

The salary decision followed formal approval of the district’s tax levy at $3.25 for operations and $1.05 for debt service. Voters approved the 50-cent operating increase Aug. 4 after a similar proposal fell four votes short earlier this year.

The district had identified employee compensation as one of the primary reasons for seeking the levy increase, but James told the board the significance of the election went beyond the additional revenue.

“Our message will be that this is not just additional revenue,” James said. “This was a vote of trust for us.”

That trust, he said, creates an obligation for the district to demonstrate that the additional investment produces results. “We simply cannot say, ‘Well, now we’ve got it, and we’re okay,’” James said. “We have to show a return, and we know that.”

That responsibility could extend well beyond the current budget year. “Should we ever need anything else, we have to show in good faith that we gave a great return for our money,” James said.

For the coming year, he said, that return will be measured not only through compensation, but through student performance, working conditions and the district’s ability to keep employees. “That’ll be our focus this year, and that’s going to be focused on student achievement and culture and climate here in the building with our staff,” James said. “And of course, an improved retention rate would be great going into next summer, so that we’re not hiring as many fillers as we are.”

The district had identified employee compensation as one of the primary reasons for seeking the levy increase. Last year, Linn R-2’s teacher base salary stood at $37,000 as Missouri moved toward a $40,000 minimum and future mandated increases. The $40,000 salary schedule was the most aggressive of three options presented to the board.

The $39,000 and $40,000 options also called for decompressing the remainder of the certified salary schedule rather than simply increasing beginning teacher pay.

An additional consideration emerged as the district prepared for the school year. Requirements associated with Missouri’s Teacher Base Salary Grant created concern that delaying approval of an updated salary schedule could potentially place grant eligibility or funding at risk.

That made the question less about whether the district intended to increase teacher compensation and more about how quickly it should make the move.

The salary increase also requires the district to spend additional money before it begins receiving revenue generated by the new levy, which is expected to begin arriving approximately in January or February.

Linn R-2’s financial projections, however, indicate it can make the move while remaining near its longstanding fund balance target.

The district closed the recently completed fiscal year with a combined fund balance of approximately 27.4%, according to its Annual Secretary of the Board Report (ASBR). That was somewhat below the approximately 29% anticipated in earlier budget projections.

The ASBR represents the district’s official year-end accounting of revenues, expenditures, fund balances, and other financial information, and will serve as the foundation for its upcoming independent audit.

With the additional levy revenue and other projected revenue changes, the district estimated its ending fund balance could increase to approximately 33.67% before the salary adjustment. Moving immediately to a $39,000 teacher base would reduce that projection to approximately 31.64%, while adoption of the $40,000 schedule places the projection at approximately 30.60%.

That leaves Linn R-2 near its goal of maintaining a fund balance of approximately 30% or better while addressing teacher compensation immediately.

James said the levy significantly strengthens the district’s financial position. “I think, relatively speaking, we’re in a strong position, especially with just passing the levy,” he said. “I mean, obviously, we could always use additional revenue to do the things that we’re doing, but having the additional levy that we just passed — that was our main focus, focusing on salaries and benefits. So I think that strengthened us moving forward.”

The ASBR likewise projects that the additional operating revenue, combined with continued control of expenditures and other budget considerations, should place the district in a surplus position during the current fiscal year.

James cautioned, however, that passage of the levy should not be interpreted as an end to Linn R-2’s financial challenges. “I think we’re in a good position with a couple of key strategic moves going into next year to survive what is undoubtedly going to be a difficult financial short-term future,” he said.

State funding remains one of the largest concerns.

James told the board that since the district last discussed projections for the coming year, the anticipated state adequacy target had already declined from approximately $6,500 per student to $6,400.

“We lost $100 a student that quick, which is about a fund balance point,” James said. “So just from the time we last spoke until now, predictions were $6,500. Now they’re $6,400, and that’s really difficult to track when they’re going that way.”

He contrasted that change with the increase in compensation districts are being required to absorb.

James said the state adequacy target was approximately $6,375 about a decade ago. During roughly that same period, he said, certified salaries and benefits have grown from approximately $28,000 to $40,000, an increase of about 38%.

“I’m not saying that we shouldn’t catch up, but keep in mind, of that, we only went up, from a state funding perspective, $25 next year between $6,375 and $6,400,” James said. “So, we go from an eight-tenths of 1% increase to the SAT with a legislative demand to go up 38% in salaries and benefits. You see the extremely difficult position that can put us in.”

That pressure means the new levy will not eliminate the possibility of additional reductions. “We’re still going to be planning for additional cuts next year, should they be necessary,” James said. “I’m going to keep us in that conservative spot, but focus on what it’s like to go to school here for staff and students, and outstanding student achievement, while we’re fiscally conservative and responsible, showing a return. That is us moving through this next year.”

The district’s assessed valuation provides another piece of the improved revenue picture.

James said Linn R-2 is now at approximately $98.7 in assessed valuation following growth of about 2.7%.

The combination of that growth and the higher operating levy is expected to generate approximately $563,482 in additional revenue. James said roughly $490,000 of that amount comes from the operating levy increase, while approximately $75,000 results from increased assessed valuation.

He expects the district’s assessed valuation to move beyond $100 million next year and said continued valuation growth could generate additional revenue even without another change in the tax rate.

Still, James repeatedly returned to the distinction between having more money and using it effectively.

During his superintendent’s report, he described the question in terms of whether the 50-cent levy becomes an expenditure or an investment.

“We either created a 50 cents per $100 expenditure, or we created a 50 cents per $100 investment in our community,” James said. “Now it’ll be a lot about us returning that investment for the community.”

That return, he said, will involve more than the salary schedule. “It’s very important for us to do that in terms of curriculum, assessment, accountability,” James said.

Those areas will become a significant part of the district’s work during the coming year.

With Missouri’s MSIP 6 accountability system becoming increasingly important, James said administrators have been asked to review their building and program improvement plans along with the district’s Comprehensive School Improvement Plan.

Administrators will return that information to him, after which James said the district will seek community input and feedback from board members before revamping the plan.

The emphasis mirrors the broader direction James outlined in his State of the District report: Linn R-2 has spent several years building financial stability, improving facilities, strengthening programs and changing organizational structures, but the next phase will center on what the district does with those resources.

For James, passage of the levy changes the relationship between Linn R-2 and a community that has long supported its schools through volunteer work, donations, booster organizations, and individual projects.

“What we got the last 20 years is a lot of support from our community, but they wanted to keep the strings and control of that, so we see that volunteerism and donations,” James said.

The operating levy represents something different because voters have now entrusted those resources directly to the district. “Now they’ve given us the control over that in terms of tax rate,” James said. “Now they’re giving us that resource and trusting that we do great things with it.”

The first visible result of that trust will arrive in teachers’ September paychecks, but James said the larger test will take considerably longer.

The district must continue to prepare for uncertain state funding and possible future cuts while improving student achievement, strengthening curriculum and accountability, improving working conditions and retaining more employees. “And so we’ll be focused on that for the next 12 months,” James said.