School District's 'Toughest' Budget to Be Introduced Monday Night

The Peters Township Board of Education will post the new budget for 2011-12 Monday night, and although it will be the first glimpse of the new spending plan, the budget will be a work in progress for school board members for the weeks to come.

Combined with the proposed by Gov. Tom Corbett’s budget, and a loss of $800,000 from a bond issue refinancing, the district faces almost a $1.7 million deficit to just stay even with the 2010-11 budget, without any additional expenses due to increased costs.

Those costs include contractual step and salary increases for teachers, and higher operational  costs, according to budget and finance committee Chairman .

“At one time we were up to a $3.3 million deficit when we began the process, and we’ve cut that down to about $1.8 million,” he said. "It was pared back by looking at technology, looking at equipment, looking at curriculum and textbooks.”

One fortunate aspect of the new budget is the district’s health care plan, which will not have an increase, since it is through the Intermediate Unit, McMurray stated.

McMurray noted that the board attempts to continually review programs and put them into a plan.

“Part of our budget process each year is that we do at least a five-year projection,” McMurray explained. “We look to see where we think our revenues are going to be, the number of housing starts we will have, what kind of expenses we will have among other things. For instance, we know that teacher contract costs will always increase. We also look at our technology costs, as well as (costs) for curriculum. We try to separate it out so that it evens out.”

This year however has become more of a challenge, McMurray said.

Between the budget’s introduction, and final adoption scheduled for June, the board will be looking at additional ways to cut expenses from the posted plan. They expect to make up the deficit through what is likely to be a tax increase of approximately one mill, and use of some of the district’s fund balance, which is projected to be about $11.8 million by June 30.   

“At this point in time I don’t see how we possibly cannot (use part of the fund balance),” McMurray said. “We might be able to buy a year or two because of the fund balance, but you just can’t keep hitting away at it. But it’s our rainy day fund, and it has to be there for the future.”

Expected to be part of the cuts are three reductions in teacher staff positions that will be reduced through attrition. Three teachers will be retiring at the end of this year and the positions will not be filled.

“We still have a ways to go, and we’re looking at other cuts, such as paraprofessionals, janitors and other support staff for possible cuts, while we try to keep an eye on enrollment. We try to keep an eye on class size, which is something everyone has an opinion about.”

McMurray said that there are several positions, such as special education, which cannot be cut.

McMurray said the proposed budget is being formulated to keep the high educational standards, while keeping in mind class size.

“We’ve got high standards and a darn-good district, and we don’t want to hurt it any more than we have to.”

The posting of the tentative budget comes after months of meetings of the budget and finance committee, and other committees as well, as they attempted to find ways of funding district programs and services, while maintaining current educational programs. With the loss of almost $1 million in state funding, balancing the 2011-12 budget has made it one of the most challenging in recent history.

“This is my 28th budget, and it’s been the toughest,” McMurray said. “There were some tough budgets years ago before the growth of Peters Township started, and we only had fund balances of a couple $100,000 dollars. But we always had the fall-back position where we could raise taxes if needed.”

The new budget and Act 1 regulations from the State Department of Education will only allow taxes to increase by 1.4 percent. The board adopted the DOE’s index in November 2010. It won’t be any easier next year.

Regardless, it will mean that the school board will have to begin to work on the 2012-13 budget, almost as soon as they approve this year's budget.

Because of the requirements by the state, the board would have to request an exception to the DOE before the end of this calendar year. If rejected, the school board would need to request a tax increase be placed on a voter referendum.

Even if the State Legislature passes a budget restoring some of Corbett’s cuts, it will be too late to help with the new budget, because it must be passed by June 30.

“They’ve cut our knees out (with the Corbett budget) and if they go through with eliminating the exceptions, I don’t know how we’ll manage," McMurray said. "We’ll have to go to referendum to finance the PSSRS (retirement fund), and the community won’t understand it."

McMurray said in the meetings held over the past several months by his committee and the other committees of the board, the budget has been the biggest issue of concern. He noted that the budget cuts across all committees of the board, and not just the budget and finance committee.

“The overall goal of all of us is to continue the high standards of education that we’ve tried to provide over the years and be able to fund it without coming up with Draconian cuts that are going to be hurtful to (education),” McMurray said.

“The board has said all along that we’re not going to hit programs, and at this point we haven’t. But we still have to go back in the next 30 days and cut the budget substantially, not knowing for sure what the state is going to do.”

The agenda for tonight's meeting will be available this afternoon here.