LEWISTOWN - For administrators and school board members alike, the Mifflin County School District's 2012-13 general operating budget continues to be a work in progress as the June 30 deadline nears.
On Tuesday, the Mifflin County School District Board of Directors met to discuss the budget process with administrators, and were told that without a tax increase the budget deficit still stands at $1.66 million with a projected total budget of $63 million as the target.
Sean Daubert, the district's chief financial officer, said the meeting opened with an updated five-year projection model on where the district will be financially under a scenario that the state education funding would remain flat during that time. If that is the case, Daubert said the district will probably face sharp increases in both healthcare costs and the required retirement contribution every year during that time span.
"We tinkered with two different possibilities," Daubert said. "We're pretty confident the insurance costs will go up 15 percent for 2012-13. And one of our models shows a 15 percent increase every year."
Daubert said that with those estimates in mind, the current $10 million per year the district is spending on healthcare insurance will rise to $17 million at the end of the five-year projection period.
Another rapid rise in costs facing the district is state-mandated retirement contributions.
"Retirement currently costs us $2.4 million," he reported. "By the end of the mandated yearly increases, those costs will be up to $6.4 million. They'll almost triple."
Superintendent James Estep said that taking those assumptions don't bode well for the future.
"Even if we assume keeping wages flat the entire time, not adding new programs, and remaining as conservative as we can with spending, if we do that with no tax increase, we're looking at deficits by the end of the five-year cycle that would be almost within a year or two of becoming financially insolvable," Estep said.
Estep said that even if the administration plugs in the maximum tax increases allowed by law, they still won't cover the increased costs of health insurance and retirement benefits.
"The models show the impact or lack of effort from the state legislature when it comes to funding public education and its impact on the Mifflin County School District," Estep noted.
During Tuesday's meeting, Estep said the board discussed a wide variety of potential cost-cutting measures as it wrestles with the decision of whether or not to raise taxes again.
"We discussed (cutting) in some of the non-mandated areas," Estep said. "From an education standpoint, the administration doesn't want to see them go. They may not be mandated but we believe they're good for the kids."
Estep said some of the non-mandated programs discussed were elementary art, music and phys ed.
"Administratively, we don't think it's a good idea to cut those out," Estep said. "If they did it could create substantial savings, however. From what I sensed from the board, I don't believe they want to cut those either."
Another hot-button issue discussed, Estep said, was the possibility of cutting kindergarten from full-day to half-day.
"The board was adamant they didn't want to do that and I was glad to hear that," Estep said.
Other cost-cutting measures talked about included requiring students wishing to take the AP exam to pay the entire cost, an increase in the student activity participation fee from the current $30 to $75, an increase in the student parking fee from $30 to $50, possible reduction of shuttle runs and adjusting athletic practice schedules accordingly, the possible elimination of junior high softball, soccer and varsity indoor winter track, and cutting the number of junior high athletic contests.
The future of Union Elementary School in Belleville was another topic of discussion Tuesday, Estep said.
"We reviewed the cost of continuing to operate Union Elementary," he said. "There are some potential cost savings there."
Estep said it costs the district $537,000 per year to operate Union currently. If the board chooses to close the school, Estep said the district would save approximately $198,000.
"We wouldn't be eliminating the teachers because they would be needed at IV Elementary," he pointed out. "But we could eliminate office positions, custodians, fuel and maintenance costs."
Estep said the district is also looking to save money on attrition as retirements are announced.
"We have a couple of retirements that we're looking at not replacing," he said. "We're looking at some reorganization in administration as well, with, through attrition, restructuring the amount of days assistant principals work and possibly eliminating an administration position."
Whatever decisions lie ahead, Estep said they will be painful.
"I think this school board, like a lot of other school boards in the state, struggles with regard to whether or not to increase real estate taxes, especially at a time when everybody in the community is struggling," Estep said. "They're really struggling with this. I don't think it's the board's fault that the system is gamed the way it is. In my opinion, state government is not doing it's constitutional part in funding the public education system. If the governor and the legislature are not willing to fund at levels constitutionally mandated, boards have very difficult decisions that bear on the backs of real estate owners. But, at the end of the day, we're required to pass a balanced budget."
Estep added that he would like to see some research done on the premise of what exactly state government is for.
"What it it's primary purpose?" he asked. "I always believed it was to ensure services such as public education, police and fire protection, infrastructure and such. If the government isn't going to support those things, then I question what is the state government serving for its original intended purpose?"