With projected budget gaps looming starting in ’13-’14, administration looks for savings options if needed
By Mike McGann, Editor, UnionvilleTimes.com
EAST MARLBOROUGH — While the process to develop the 2012-13 school year budget for the Unionville-Chadds Ford School District has been among the quieter and least controversial in years, district officials say they worry that the following years will likely be much more difficult.
That’s why as part of a new proposed goal for the district’s finance staff and administration is a process to perform fiscal triage on the district’s programs — in part to have options if cuts are needed at some point down the road, in part to look for parts of the program that are costing money but not necessarily serving students efficiently.
Dr. John Sanville, Superintendent of Schools, said Monday night during the Board of Education’s Finance Committee meeting that current projections suggest a budget gap of $1.5 million for the 2013-14 school budget, with likely additional budget gaps of similar amounts in each of the four years. That means, he said that by the 2016-17 school year, the district could be facing a cumulative gap as big as $6 million.
“We are facing some rough waters,” he said. “And that’s out of only a $70 million or so budget — it’s fairly large percentage.”
A number of factors stemming from the current economic downturn appear to be at play here, district officials say. At the top of the list: pensions. With the Pennsylvania School Employees Pension System (PSERS) still seriously underfunded due to cuts in district and state contributions earlier in the decade, an additional $650,000 per year in pension obligations are expected to be added each year.
While that alone might be troubling enough, the district is facing two other funding issues: thanks to Gov. Tom Corbett’s new funding “block grant” proposal, state aid numbers that rose with inflation — Social Security reimbursement as an example — are now expected to remain flat, essentially cutting state education aid every year by the rate of inflation. While the new funding system had minimal impact on the 2012-13 budget, officials say, the impact will begin to be felt more sharply during the 2013-14 budget year.
At the same time state aid is being cut, the Corbett Administration has reduced options for school districts to seek exceptions to the Act 1 tax increase limits, and those exceptions are expected to phase out over the next few years. There have already been moves afoot in the legislature to rework Act 1 to require any tax increase be approved by a voter referendum.
The final issue: the drop in real estate valuation, which in turn has dropped tax income during the last two years. The combination of property reassessments and new, lower sales prices has caused a net reduction of the tax base in the Unionville area, cutting revenue. District officials expect that trend to continue at least for the near term.
Although district officials acknowledge that the $1.5 million figure represents the likely worst-case scenario — the outcome a “conservative” look the budget projections — even if the numbers turn out better than expected, some sort of revenue shortfall is likely. With what would be increasingly hard limits on revenue, district officials say, the only alternative will be to look at cutting spending.
By spending time now and doing it in a considered, careful fashion, the district won’t find itself forced to cut quickly and hope the results work out at some point down the road.
“We’ll look at declining programs — we’ve already done it on an informal basis, but not a measured approach,” said Bob Cochran, the district’s Director of Business and Operations. “We’re going to look for underutilized programs to have options.”
He cited cuts in recent years such as the midday bus for kindergarten and middle school German as part of what had been an informal process — driven by a need to close a budget gap.
Sanville noted that money would not be the lone consideration in the decision making process.
“The numbers will be looked at,” he said. “But other opinions will included.” He said teachers, students and parents will get input to the process before any decisions are made.
While grey skies are on the district’s fiscal horizon for 2013-14 and beyond, a small ray of sunshine for the coming year’s budget: because of the Homestead/Farmstead gaming funds, the tax rate in the new budget is going to drop by one mil from 25.19 to 25.18. That means the weighted tax increase — the net number averaged across Chester County and Delaware County will be 1.80, down from 1.83% in the budget expected to be formally adopted next month.