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By LAKESHIA KNARR
MILL HALL – One thing was clear after the Property and Finance Committee meeting held by members of the Keystone Central school board last night – the state’s inability to pass a budget has put quite a strain on public schools.
As districts across Pennsylvania are working on their 2016-17 budgets, the state has yet to adopt a 2015-16 budget – causing some real issues when it comes to projecting allocations from the state.
“The difficulties surrounding this budget process are compounded by unknowns at the local and state level,” said Susan Blesh, business manager at Keystone Central. “Locally, all of the bargaining agreements expire June 30, so it is unclear how much salary and benefit costs will change. At the state level, the current proposed budget does not address pension reform or the cyber-charter funding formula, nor do we have any direction on proposed subsidy allocations.”
That said, the business manager provided two budget options for the board to consider.
Both budgets were based on a tax increase, as well as increases in the pension contribution rate, charter school payments, health care costs, and salaries. They also accounted for the replacement of 33 retirees (28 professional, three administrative, a secretary and a support staff member).
Since the board approved a resolution to not raise property taxes above the limit set by the state for the district, it may raise taxes only 3.3 percent. Once any county in the district’s tax base hits that limit, the rate for the other counties is determined, Blesh noted.
In the proposed budgets, the property tax rate is brought up by to 3.2 percent for Potter County property owners, the rate for Clinton County by 2.87 percent, and 1.36 percent for Centre County. That would equate to $585,681 in additional revenue for the district, Blesh said. (No tax increase would still bring in $139,500 through natural growth.)
For a median assessed parcel at $93,300, that increase equates to $115.69 for Potter County property owners, $32.66 for those in Clinton County and $55.98 for those in Centre.
Both projections include a 2.75 percent increase in salaries across the board, although the district is unsure where contract negotiations will end up for each of the five bargaining units. They also include a 3.6 percent increase in health insurance costs and a 4.19 percent increase in the pension contribution rate.
The charter school costs are expected to increase 22.59 percent due to increases in rates as determined by the state.
The major difference between the two options is that one budget option – called the “wish list” – includes the addition of 14 new positions district-wide, as well as three new programs.
The alternate budget does not account for any new programming, but it does include the creation of two of the proposed 14 positions.
Regardless, it appears the business manager will be heading back to the proverbial drawing table, as the six board members seemed adamant they are not interested in raising taxes.
OPTION A
Under Option A, the district adds the 14 new positions and three new programs. Expenses total $79,204,501.
The total projected revenue is $69,814,244, leaving a deficit of $9,390,257 which would need to be covered by the district’s fund balance. After this school year, the fund balance is expected to be $17,168,786. Covering the deficit would bring the fund balance to $7,778,529 after next school year, if everything goes as projected.
The revenue in both scenarios (both have the same tax increase) is comprised of $31,517,927 from local property taxes; $36,321,639 from the state and $1,974,678 from the federal government.
The new programs discussed include an elementary-level cyber school program, a Heart Academy (or alternative school) and a 4-year-old (preschool) program. All three of those ideas were devised by Superintendent Kelly Hastings, when tasked with the responsibility of finding ways to bring students out of charter and cyber-charter schools and back under the main Keystone Central umbrella.
The total cost for the three proposed programs is $3,041,656, with the elementary cyber program expected to cost $200,200 in the first year, the Heart Academy $2,093,240, and the program for 4-year-old children $748,216.
The new personnel proposed by administration include an elementary principal (currently, Mill Hall and Liberty-Curtin elementary schools share a principal), an assistant principal for Bucktail Campus, an assistant supervisor for the Special Education department, three itinerant instructors (music, physical education and enrichment), three special education instructors, a career counselor for kindergarten through 12th grades, a technology integration coach, and three secretaries.
As for compensation plus benefits, the administration positions are projected at about $140,000 each, the instructors at about $90,000 each and the secretaries about $47,000 each.
Also included is the potential to reduce personnel by half a position, as regulations for the Career and Technical Education program indicate that enrollment in the auto body program equates to the need for only a half-day teacher. (The district is trying to get the automotive instructor certified to also teach auto body and auto mechanics.)
OPTION B
Under Option B, the district creates two positions. Expenses total $75,565,035.
The projected revenue remains the same, at $69,814,244, as both options include the same tax increase. The deficit in this scenario – and thus the amount needed from the fund balance – is $5,750,790.
The two positions included in this projection are the assistant special education supervisor and the assistant principal for Bucktail.
CONVERSATION
Board members present at the first Property and Finance Committee meeting held to discuss the 2016-17 budget were Roger Elling, committee Chairman Jeff Johnston, board President James “Butch” Knauff, Wayne Koch, Charles Rosamilia and Debbie Smith.
Much of the conversation revolved around the proposed new positions and programs… and charter school enrollments.
Since the new programs outlined and included in the budgets are intended to reduce the number of students leaving the district for charter and cyber-charter schools, board members were curious about their expected success.
“There are some costs that we’re putting out there right now… if there was an alternative place for these students (leaving for charter schools) to attend, we might be able to draw some of these kids back into our system,” explained Terry Murty, curriculum director.
Charter school costs are expected to increase 22.59 percent due to increases in rates as determined by the state (currently about $9,300 per regular education student and $24,000 per special education student). The new rate hasn’t been certified by the state but would bring the total bill for charters – both online schools and brick-and-mortar facilities – to $5,826,726 for Keystone Central.
That figure, Blesh noted, does not reflect any new students leaving to attend a charter school, rather it is based on current enrollment.
“That 22.59 percent increase for charters… that’s mostly due to the governor promising us something and he didn’t live up to that promise,” said Knauff, referring to the new charter/cyber funding formula that did not pass during the 2015-16 budget year.
Koch said the board should consider how the pending hearing on the Sugar Valley Rural Charter School’s charter will impact charter-related expenses and the need for these new programs.
“Have this in there, instead of worrying about (charter) renewal or non-renewal, and we may be able to draw some (students) back,” said Knauff. “Right now, we have to look at providing the best system, no matter what… Listen to what those people (who attended the charter hearings) told us and build programs to pull these kids back.”
“They’re our kids as much as kids in our school district are,” said Rosamilia. “We have the same obligations to them as we do our own.”
In addition, Koch asked if the Public School Employees Retirement System (PSERS) contribution rate is expected to decline in the future. That rate, also determined by the state, has been increasing significantly in recent years after the system was underfunded in the late 1990s and early 2000s.
Blesh told Koch the rate caps in 2018-19 at 31.28 percent and is expected to stay there for about 10 years.
“It’s already at an unaffordable rate,” Knauff said. “That’s another thing the governor and legislature planned to address and they haven’t.”
“They haven’t addressed a lot of things this year,” Johnston added.
Rosamilia asked how, in past years, the district was faced with projected deficits but ended up making out better than anticipated.
Blesh said that right now, expenses this year are on par with the projected budget approved last year. However, in years past, the district’s health care plan cost less than anticipated.
“There’s so much speculation because the state budget is what it is,” Rosamilia concluded.
He noted he is a “strong believer” in 4-year-old programs, and suggested another meeting be held to discuss the proposed programs and positions in more detail, outside of strictly budget talks.
GOING FORWARD
“Speaking for myself, I personally am not in favor of any tax increase. I think we should put it where it belongs – back to the children in Harrisburg,” said Knauff. “I feel the executive branch and legislative branch should all submit their resignations… How are we supposed to pass a budget based on their numbers when they can’t pass a budget?”
Koch asked how the district can work to pressure legislators.
“We’ve got to figure out other ways to really put pressure on Harrisburg,” Koch said. “We’re breaking the backs of taxpayers already.”
“I’m just tired of putting the burden of financing on the taxpayers of Clinton County,” Knauff added. “They refuse to raise taxes (in Harrisburg) and put the responsibility back on us.”
The committee intends to meet again April 13 at 6 p.m. in the Administration Wing at Central Mountain High School to further discuss proposed programs and positions.