Kennett school officials warn of likely future cuts, will adopt ‘status quo’ budget for 2012-13
By P.J. D’Annunzio, Staff Writer, KennettTimes.com
KENNETT SQUARE — The Kennett Consolidated School District’s Board of Education will opt to again tap reserves to close a budget deficit, but district officials warn that with increasing costs, pensions in particular, and cuts to state aid and a shrinking real estate tax base, the district may have to make cuts to its educational program in coming years.
By taking about $1 million from reserves, the district will be able to have what officials called a “status quo” budget — one with no new programs, but no cuts to existing programs or personnel, closing a budget shortfall caused by drops in state aid — particularly by accountability block grants cuts proposed by Gov. Tom Corbett in the state’s new budget.
On last Monday night at the Kennett High School auditorium, an unusually large crowd gathered to view the KCSD Board’s presentation on its final 2012-2013 budget proposal.
Finance Committee Chairman Michael Finnegan introduced the presentation, explaining the many facets of KCSD’s $72 million budget, including; salaries, special education programs, technology, utilities, transportation, employee benefits, and many more.
Recognizing the grim fact of a growing funding crisis for many Pennsylvania’s schools — in part caused by aid cuts from the state and the Act 1 limits that limit real estate tax hikes beyond the cost of living, coupled with unanticipated drops in real estate assessments that further reduce revenue — Finnegan took the time to reiterate the district’s commitment to student success in the face of great economic adversity, stating that the mission of the district is and always will be “to provide a quality education that increases the achievement of every student in order for all to be successful and thoughtful contributors to society.”
However dubious the outlook may be, KCSD officials said they have decided to press forward with what the administration calls “The Status Quo Budget.” This budget promises to sustain existing programs, uphold existing instructional budgets, allocate fund balances at the 2011-2012 level, all while granting no furloughs, adding no additional personnel or programs (with the exception of the privately funded STEM program), no additional allocations, and the incursion of no new debts.
While this measure may stop the fiscal bleeding for the 2012-2013 school year, the greater trend of dependence upon real estate revenue for school funding still leaves KCSD coming up short in the future — currently the district is delving into its savings to make up for shortfalls in program funding.
“Last year was the first year that we dipped into our savings account,” KCSD Business Manager Mark Tracy said. “We used a million of the $8 million to fund existing programs. In the 12-13 Budget, we’re designating another million. We have to make that up somehow with a new revenue stream or on existing subsidies and/or taxes. We can’t keep running into a deficit.”
Tracy continued, further illustrating the troubling pattern of non-sustainability currently at hand. “In a perfect world a million a year for five years and our savings would be net zero. However, the escalation in our expenditures for the retirement, or the healthcare, or the wages, or the special education mandated programs is accelerating much faster that our ability to drive revenue.”
KCSD officials noted that the District’s Special Education programs (handled largely through the Chester County Intermediate Unit) are extremely expensive and while still being required by state law to be implemented in schools.
Currently the district spends 42% of its $72 million budget on salaries and an additional 19% on employee benefits; 14% is spent on contracted services, 11% on debt service, 8% on professional services, 3% on property services, and 3% on supplies and equipment.
In terms of income, KCSD derives 92% of its revenue from Real Estate taxes, 6% from the Earned Income Tax, and 2% from various outside sources. Take into account the continuously eroding tax base in the region, and the district could be facing long-lasting repercussions for years to come.
“We are at the breaking point. The next round of cuts will start to affect the programs of our schools,” Tracy said. “There’s been no decision made whether it’ll be instruction programs, extracurricular activities, or athletics — but we can tell you that if our real estate market does not start to improve or stabilize, we’ll be back in this auditorium talking about programmatic cuts.”
Though district officials have stated that they are pursuing all plausible avenues available to increase revenue, however they are extremely limited. Neighboring districts such as Tredyfrfin-Eastown, Unionville, and Garnet Valley have suffered similar drops in property value, largely because of reassessments, while other areas of the county such as Coatesville, Avon Grove, and Downingtown have experienced at least some growth in the assessed real estate tax base.
The KCSD Board of Education must vote to approve the budget by June 11.
