PE Boards Talk Funds
Published 3:34 pm Tuesday, February 7, 2012
PRINCE EDWARD – County supervisors and school board members took a preliminary look at school funding needs for the coming year last Tuesday. Given that there will be less dollars to go around this year, there wasn't much to chew over.
Collectively, school officials, with a declining enrollment and an unfavorably updated composite index, are facing a potential $2.2 million less for the coming budget year.
One penny in the real estate tax rate, County Administrator Wade Bartlett detailed, is around $157,000.
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“So if you do the math…you're talking like a 15 cent tax increase,” he assessed. “I can't speak for the board…but that would be a difficult pill to swallow, let's just put it that way. And there's just not a lot of room in the general fund budget as it exists today to kind of take that kind of an increase…”
Factoring the Governor's proposed budget-and looking to an Average Daily Membership (ADM) of 2,240-projects $862,999 less in state funds next year. In addition, federal funds will be reduced $904,751-translating into $1,767,750 in funding reductions. Also on the negative side, the Virginia Retirement System (VRS) rate increase is expected to translate into $876,000 more in expenditures and, following a ten percent trend, school officials are looking at the possibility of a ten percent increase in heath insurance premium costs, or $170,400.
School officials are also looking at a two percent salary increase, or $340,000.
The total funding reductions, with proposed expenditure increases, come in at $3,154,150, but with some federal funding locked into short-term expenditures (which means funds can be trimmed from the revenue and expense side of the ledger) the schools face a potential net funding shortfall of $2,249,399.
There are going to be some reductions that they're going to make, Division Superintendent Dr. David Smith said. They have not defined them yet, but he noted he was just telling them early what challenges the board is facing as they deal with reductions.
“I do know if we have to reduce the full $2 million, it's…really gonna hurt students in classrooms,” he added.
Bartlett asked if they didn't receive the $2.2 million what kind of actions they would have to take.
“We'd be eliminating teaching positions at all three schools,” Dr. Smith detailed. “We'd potentially be closing down some programs…and stop offering some electives that students need, but enrollment might not be extremely high for, but students need 'em for course completers or for their academic preparations…We would have to look at everything in the budget-I mean absolutely everything.”
The two boards are scheduled to meet again March 6. Dr. Smith noted that they would have a “much, much sharper idea then and we'll know a whole lot more about what the legislature is doing.”
He also added that they may have a clearer indication of what they're going to do with the VRS by then and should know what the insurance renewal rate will be.
The issue of health insurance prompted some discussion on the potential option of exploring a self-insurance option. Other localities (including Cumberland) have chosen that option over participating in the Local Choice option and, while it may not be viable to consider in time for this budget cycle, it could be studied for the coming year. County and school officials are expected to seek additional information from a consultant.
While it may or may not cost employees more or render less benefits, there was an air of caution offered. Dr. Smith suggested they take time and be careful and get all of the details.
“…I think looking at it is very, very important. We've got to look at all options to contain our health care costs,” Dr. Smith cited. “One of the things that I think we want to be careful about, in a period of time when employees have had minimal pay raises and while their actual costs of living have increased fairly dramatically in some respects, changes that we make in health care, whether it's self-insurance or working with our providers to roll back the benefits in order to contain our cost, those dollars come out of our employees pockets and it hits them hard when there have been no pay raises to speak of for several years.”
He suggested that they approach it cautiously and really take the time to do their homework.