I know. It must be me. The School District is the sane bunch. I am the one losing it. I think it is insane that we have a $2.4 million budget shortfall, but Josephine Posti posts how the School Board is accepting the base bids on her blog today.
Renovation Bids Come in Low.
According to the Almanac article listed below, Josephine Posti is quoted as saying:
"This $2.4 million is an enormous amount," said school board president Jo Posti. "To give the public an idea of how large, our staffing review team estimated something as drastic as closing an elementary school would only save $1.1 million."
And while we're at it, let's give Tim Steinhauer another raise and more vacation time. Of course, Upper St. Clair's Superintendent Dr. Patrick O'Toole was named the 2012 PA Superintendent of the Year and will compete for the national award.
None of this is making any sense to me. I guess I should relax. The District has it covered. They want input from the community.
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Lebo schools facing $2.4 million budget shortfall
Mt. Lebanon School District was unusually fortunate to have been spared both tax increases and cost-cutting in the 2011-2012 school year. The same will not hold true in 2012-2013.
At the Dec. 12 school board meeting director of fiscal services Jan Klein explained the district is facing a $2.4 million shortfall, largely due to rising pension costs.
State-mandated pension contributions are 43 percent higher for that school year, a significant financial strain for school districts which have salaries and benefits as their largest operating costs. In Mt. Lebanon these account for some 70 percent of the budget.
"This $2.4 million is an enormous amount," said school board president Jo Posti. "To give the public an idea of how large, our staffing review team estimated something as drastic as closing an elementary school would only save $1.1 million."
Hence the district faces the classic dilemma: raise taxes or cut programming.
The problem is compounded by the fact 2012 is a presidential election year, which has shortened the budget timeline. In January state law requires the board to either pass a preliminary budget or a resolution not to increase millage beyond an amount specified by an inflationary index.
According to Klein, tax increases up to the limit imposed by the index would still leave the district's budget at least $1.4 million out of balance.
By passing a preliminary budget, the board would preserve its right to apply for exceptions from the state from that limit, allowing it to raise taxes further to cover costs such as pension contributions. Klein said this could bring the district within $250,000 of a balanced budget.
Board member Dale Ostergaard urged the board to look beyond 2012-2013, however.
"This pension spike is likely to increase for the next few years," he said. "Over the next four years we could face a $9.7 million shortfall. That would require us to raise taxes about 4.5 mills."
A single mill is equivalent to $100 of property tax on a home valued at $100,000.
Ostergaard argued relying solely on tax increases to make up for the shortfall would be too heavy burden on the community. "We need to accept the fact that change to programs and operations must happen over the next four years," he said.
Board member Mary Birks disagreed.
"I would caution this board against making any long-term decision (that would impact programming)," she said. "Remember this impact's not only the value of our children's education but also of our homes."
Complicating matters is the fact that there are still major uncertainties regarding costs for 2012-2013--never mind the four following years. The district still has yet to receive student course selections, for example, and it does not know the cost of healthcare.
On top of that there is concern about the county property assessment. Property assessments play a critical role in determining real estate tax revenue, and there is a chance the latest round will not be completed by the time the board must pass a budget.
By evening's end the board reached a general consensus that it would be better to pass a preliminary budget in January, preserving its ability to raise taxes beyond the index. Board members were also keen on establishing a forum or ad hoc committee to get input from the community.
