Our current school year finishes in one month, with estimated operational expenditures of $70.5 million. The revenue came 56% from the state government, 37% from our local taxes; 5 % from the federal government, and 2% from our savings.
The financial crisis we face next year is generated by two factors. First, under the Governor's proposed budget, our state funding will drop by 13% (approximately $5 million). Because state funding makes up the largest part of our budget, the impact of that cut is staggering. Second, we have inflation of salaries, utilities, retirement payments health insurance premiums, etc. Rural districts traditionally receive annual state funding increases which we use to help offset inflation increases. This year, of course, we face not only the loss of that traditional increase, but a significant decrease. Our total deficit is $7.2 million.
The only revenue source we control locally, to close that deficit, is real estate taxes. We don't live in a Millcreek or Warrendale, where new construction adds bountifully to the real estate tax base. A few years ago we did have the shot in the arm of Lowes and WalMart. But that increase is behind us and, overall, our tax base stays unchanged meaning that to increase local tax revenue the school tax millage rate must be increased.
Over the last 10 years that school millage was increased an average of 2% per year. Next year's proposed budget also contains a 2% increase (from 48 to 48.96 mills). However, state law prevents the school board from raising taxes any higher without referendum approval. A referendum is not possible this year because the Governor's proposed budget was revealed 2 months after the state law deadline for the referendum decision. Our proposed 2% local tax raise will generate $400,000; thus our remaining budget deficit, for next year, is $6.8 million.
The only means of closing the remaining deficit is to cut spending. Cutting $6.8 million is a daunting challenge. For example, the average teacher compensation package, with benefits, is about $70,000. If we were to balance by cutting teachers, alone, we would lose 100 teachers, or about 20% of our teaching staffclearly an unacceptable choice.
Also unacceptable are cuts which violate state and federal law. Under those laws we must meet mandated course offerings and stipulated instructional hours. Moreover, those course offerings must by taught by properly certified staff. Those certifications go beyond what many think of as "traditional" educational functions, and include, for example, physical, occupational and speech therapists. Federal and state laws now recognize autism, attention deficit disorder, alcoholism, oppositional defiant disorder, and hundreds of other diagnoses, as special needs for which public schools must provide special services. Under those same laws we are required to hire staff persons to work on a one to one basis with students; we must provide kitchens, showers and bathrooms in which to teach basic living skills. Spending for these special needs goes up, significantly, virtually every year.
Where then, can we cut? We have been growing leaner in administration, down from 9 central office directors just a few years ago, to a proposed 5 for next year. We are eliminating building administrative positions as well as central office secretarial positions. Altogether our proposed budget will reduce administrative staffing by 14% and the remaining administrators (as well as non-union employees) have indicated a willingness to accept a pay freeze. Including a pay freeze and position cuts, the administrative staff will be hardest hit by next year's budget. In addition, maintenance, custodial, and teacher aide positions are being eliminated.
We are shuffling students at Sheffield and Allegheny Valley elementary schools so that all K to 2 grade students are combined at A.V. and all 3 to 5 grade students at Sheffield. This forces us to do away with small class sizes of only 15 or 16 students and results in 21 to 25 per class at AV and Sheffield. This is a savings in teacher efficiency. Over the last 10 years the District already reaped similar savings by closing Pleasant, Jefferson, Market Street, North Warren, Home Street, Scandia, Lander and Pittsfield elementary schools. At least at the elementary and middle school levels, there are no more similar savings to be had.
We recently made changes in our transportation policy that will reduce the number of bus runs. The vans we see on the roads are mostly the product of filling special needs-because of state and federal laws the vans are difficult to reduce.
With the 13 school buildings in existence today, repairs, snowplowing and utilities make up a smaller portion of our budget than they did 20 years ago when the district had 22 buildings. Thus, it is hard to squeeze many savings out of utilities. To do so we are discussing changing school calendars. Furthermore, we reduced annual repair funding by $250,000, but the danger in that is, that over the past 20 years, much needed maintenance was delayed while the high school debate lingered. Consequently we have a $20 million list of short term repair and replacement projects; long-term needs are in excess of this figure.
Our proposed budget has us cutting 60+ teacher positions, (which includes 15 retirees who will not be replaced), and wiping out, entirely, our tutoring program. The reduction in teaching positions is similar in percentage to the reduction in administrative positions. These are terribly painful cuts. But even with these (and other cuts, such as the controversial sports consolidations) we are still shy $500,000 of balancing the budget.
The school board is frequently asked about the Master Facilities Plan and whether high school consolidation or other MFP changes will relieve next year's budget crisis. The short answer is "no." The MFP doesn't call for increased spending in next year's budget. But the MFP does have long term consequences and the MFP deserves discussion in a separate article.
There is no single fix to our crisis, and beyond the radical cuts we must make locally, many of the long-term solutions are beyond our local control. School districts across the state are suffering identical crises. Despite the loss of significant state funding local school districts are still required to abide by expensive state programming mandates, state-controlled retirement payments, and state limits on local taxation. The discussion in Harrisburg will not be mature until Harrisburg resolves the dilemna between what it funds and what it mandates.
Arthur Stewart is president of the Warren County School District Board of Directors