The Tooele County School Board got its first look at a $127.8 million preliminary budget for 2008-09 last Tuesday, that is down 4.3 percent from last year.

The decline was mainly due to a drop of $9 million in the district's capital outlay fund as Settlement Canyon Elementary School is completed. All other budget funds show an increase for 2008-09.

Richard Reese, business administrator for the school district, said increasing enrollment and rising costs associated with staffing account for most of the increases.

The maintenance and operation fund, which covers the day-to-day costs of providing education to students, comprises the largest category in the budget. Expenses for maintenance and operations are projected to grow by $2 million to $77.6 million -- a 2.7 percent increase. Driving that increase are an additional 21.5 new certified staff positions, an anticipated enrollment increase of 483 new students, an 8.8 percent increase in employee health and accident insurance premiums, a 6 percent increase in dental insurance premiums, increasing fuel prices, and staff salary increases currently under negotiation.

The cost of district administration was 2.6 percent of the maintenance and operations budget. District officials anticipate keeping administrative costs under 3 percent of the budget -- one of the lowest rates in the state, according to the district's annual report.

The $28 million capital outlay fund includes both improvements to buildings and costs associated with building new schools. The fund shows a decline of nearly $9 million from last year. This is largely due to the completion of Settlement Canyon Elementary, which will open this fall.

The food service fund shows a $26,502 increase in projected expenses. The district budgeted for a 20 percent increase in the cost of food for next year. Food costs have risen dramatically across the nation, and some Wasatch front schools have already announced student lunch price increases for next year, Reese said.

The Tooele County School District's preliminary budget does not call for an increase in school lunch prices. Instead, indirect costs, such as utilities, that were part of the food service budget will be shifted back to the maintenance and operation budget. Lunch prices may need to increase beginning in the 2009 school year, according to Reese.

Other funds included in the budget are student activities, non K-12, and debt service. Student activities include any expenses at the building level such as school land trust money allocated by community councils, classroom supplies and student events. The non K-12 fund covers adult education and pre-school costs. Debt service is primarily the cost of long-term debt used to build new schools.

The increased expenses in the maintenance and operation fund will be covered by several revenue sources, including a 2.5 percent increase -- from $2,514 to $2,577 -- in per-pupil funding from the state Legislature.

Local property tax rates levied by the school board may also be adjusted for next year once the current assessed value of property is available.

"We anticipate the final budget will not require a truth-in-taxation hearing," said Reese.

A truth-in-taxation hearing is required when a taxing entity, such as a school district, proposes to collect more revenue than was collected the previous year -- not including revenue from enrollment growth. Truth in taxation is dependent on total taxes collected, not the tax rate. Due to increased property values, a tax rate could remain the same or even be lowered but still produce an increase in revenue collected.

Last year, the district lowered its tax rate from .008896 to .008411.

A public hearing on the 2008-09 budget is scheduled for the school board meeting on June 17, 6:30, at the Tooele County School District Office in Tooele.

tgillie@tooeletranscript.com