State subsidy cuts and salary and benefit increases are two of the major fiscal challenges school officials faced in putting together the North East School District 2011-2012 budget.
Details were shared at the April 7 NESD School Board meeting regarding anticipated increases and cuts the district will make for next school year.
Over $1.2 million in state cuts are proposed with the Governor’s budget, along with almost $695,000 in salary, health insurance and PSERS (Pennsylvania State Employee Retirement System) contribution increases. An increase of just over $150,000 in debt service and $50,000 increase in fuel costs along with a mandated increase of just over $78,000 for special education are anticipated.
Business Manager Brian Polito said the district needs to cut $1,990,116 to balance the 2011-2012 budget.
The district’s proposed response to the state reductions include:
- cutting $878,698 through 11-12 staff reductions including elimination of some support staff positions, professional staff positions and eliminating department head titles;
- $762,433 in prior cuts and elimination of reserves;
- $140,370 decrease in equipment supplies and books;
- $24,800 cut in professional development;
- $20,000 savings by no longer funding Gettysburg and Camp Notre Dame trips;
- and $25,015 in ‘other’ reductions
State subsidies would account for 56 percent of 2011-12 revenues, with Real Estate Taxes providing 35 percent. Federal subsidies and Earned Income Taxes contribute four percent each to the revenues. Other local revenues comprise one percent, of $176,000 of the budget and other taxes of $97,000 contribute less than one percent to the revenues.
Salaries and benefits, at $14,026,429, make up 69 percent of the 2011-12 expenditures, followed by purchased services at $2,965,494 for 15 percent. Seven percent of the expenditures at $1,540,170 is debt service followed by five percent for Equipment and Supplies at $942,535. Utilities and fund transfers and reserves at $478,500 and $367,300, respectively, account for two percent each of the expenditures.
Nearly $600,000 has been saved since the 2005-06 school year to 2008-09 through cost savings initiatives ranging from renegotiation of the copier contract to changing banks, purchasing natural gas directly from suppliers, reducing district-funded travel, adjusting health costs and more.
Budget and staff reductions in 2009-10 and 2010-11 resulted in almost $340,000 in savings with building level budget reduced, adjustment of professional and support staff schedules, adjustment of tax collector compensation. Additionally, reduced custodial hours in all buildings, elimination of high school social studies staff by .5, high school English reduced by 2 positions, elimination of one bus run, replacing a high school principal with an assistant and reducing grade 3 from six sections to five with an instructional aide for support contributed to the reductions.
Items impacting future budgets include a continued increase in retirement contribution, projected increases in health insurance costs, capped real estate taxes, vouches and state subsidies expected to remain flat.
NESD administrators recommended to the board that a tentative budget with a two percent real estate tax increase for 2011-12 be adopted. A two percent increase will raise taxes on a home assessed at $100,00 by 31 per year.