$658,000 budget gap could mean cuts to program or staff
By P.J. D’Annunzio, Staff Writer, KennettTimes.com
KENNETT SQUARE —Even with a planned 3.89% tax increase, the Kennett Consolidated School District faces a budget deficit of about $658,000 and will begin to tackle the shortfall during the Board of Education’s Finance Committee meetings in April.
Two big issues are making this year’s budget process a challenge: first, although the original budget expected that state funding would remain at the same level as 2011-12, Gov. Tom Corbett’s 2012-13 budget would cut $193,000 in transportation and accountability block grant funds. Add changes to billing practices by Independence Blue Cross, resulting in higher than anticipated higher health care insurance costs to the tune of $465,000 and the district finds itself with a much more difficult financial situation than expected even just a few months ago.
KCSD, like many of its neighbors, has been hit hard but losses in local real estate taxes, both with interim and transfer taxes dwindling to low numbers — and property reassessments, which have lowered the local tax base.
“This year poses more challenges to us than last because of the continued compounding effect of declining revenues and increasing expenses,” KCSD Director of Business Administration Mark Tracy said.
With no other options to increase tax revenue, the budget deficit will likely have to be closed through cost-cutting, whether it be program or staffing — and once again the board and administration must tackle those tough decisions.
With a millage rate to be set at 26.7303 mills, the district’s preliminary budget calls for a tax increase—above the Act 1 index—with a pair of exceptions having been approved by the Pennsylvania Department of Education to support the 3.89% proposed tax increase. The Act 1 exceptions include concessions for increases in special education costs and a Pennsylvania School Employees Retirement (PSERS) contribution from the PDE to raise taxes above the 1.7% index.
In lay terms, KCSD is no exception to the all too common rule for districts as of late: more and more schools have been forced to shift from state to local resources to obtain revenue — clearly problematic for the taxpayers in the long run.
“The District’s primary source of income — real estate taxes — is down for a third consecutive year,” Tracy said. “The real estate market collapse and the overall stagnant economy have drastically reduced the local resources available to the district.”
That being said, KCSD stands to receive an increase in local tax revenue from this year, with 2012-2013 school year tax revenue totaling $56,753,368, a $947,241 boost from the 2011-2012 total of $55,806,127.
The preliminary budget contains no new educational, athletic, or extra programs for the coming school year. In tandem with that, all educational and operational expenditures have been restricted to a zero percent increase.
Spending for ancillary programs, however, is expected to jump. Special education expenditures are anticipated to rise 5.02% from the 2011-2012 total of $10,894,574 to $11,441,776 along with vocational programs garnering a 1.56% increase in spending from $1,226,953 in 2011-2012 to $1,246,129 for 2013.
“Special education services continue to increase substantially over the other areas in the budget,” District Superintendent Dr. Barry Tomasetti said in his report to the KCSD board. “There are many factors that influence the cost of these programs, such as the severity of the child’s disability, placement/tuition of the education agency, translation services, transportation, and other related services…while other allocations have been held at the Act 1 index or less, special education services are mandated; therefore, the District lacks the authority to deny services based on cost limitations.”
A nominal increase in spending of $546,678 overall is also expected for support services such as Pupil Personnel, Instructional Staff Development, Administration, Pupil Health, Business, Plant Operations, Transportation, Technology, and the operations with the Intermediate Unit.
Additional expenditures from 2011-2012 were incurred from the construction and operation of the new Bancroft Elementary school, with funds going toward staffing, educational supplies, utilities, building administration, and more. The same can be said of the conversion of Mary D. Lang Elementary into a Kindergarten center, which required a diversion of capital and staff to cover special content areas such as Art, Music, Health, and Physical Education.
Between now and June, the board of education will have to find a way to close the gap.
