The recent election insures, in office, a majority of school board members who have publicly stated their support for 4 high schools (I exclude Tidioute from this discussion since our School Board is not faced with decisions about it). Even if the majority of the School Board members did not support 4 high schools, the Eisenhower area residents have completed the formidable work of a charter school application. The vast majority of Pennsylvania charter school applications are granted either initially, or on appeal, so long as the applicants can arrange for a building that meets state code.
Thus, it appears accurate to say, the immediate questions before the School Board are how we pay for operating 4 high schools, and whether 1 of the 4 high schools is a charter school. (If the charter school is formed then the Board must answer a sub-question: does the charter school inhabit the existing Eisenhower building or does it construct a new facility?)
We know that maintaining 4 high schools is more expensive than consolidating. When we consolidate we reduce building and utility costs. Consolidations reduce staff-with fewer schools we have fewer principals, custodians, and teachers. Since over 2/3 of our school budget is made up of wages and benefits, staff reductions are key to efficient economical operation.
We knew all this, 3 years ago, when we met as a community to discuss our high school fate. The Dejong study concluded that if we consolidated high schools we would reduce our annual operating costs by about $1.3 million per year. Despite that conclusion, public input was significantly (90%) in favor of maintaining 4 high schools. (The Dejong study contains much useful statistical information about our District and is found on the District's website.) I participated in many meetings where supporters of 4 high schools indicated a willingness to pay more to keep 4.
The factors controlling our ability to pay are different today, than 3 year ago. The most debilitating factor is the state's unprecedented slashing of our District's funding, by $4 million. This happened just a few months ago, and to balance this year's budget it was painfully necessary to cut teachers and services in ways that directly impact students. State funding makes up more than our District's income, and because our local tax income doesn't go up annually, we traditionally count on state increases to meet the next year's inflationary increases in utilities, supply costs, health insurance, and the like. Thus, in next year's budget we don't recover the $4 million and we have little prospect of state help to meet our inflationary costs. With these considerations alone we are looking at a next year shortfall of more than $2 million.
The second factor is the change in state law that passed at midnight, June 30, 2011 (with the passage of the state budget). The new law limits the amount our School Board can raise taxes without going to public referendum. (The amount we can raise next year is a little over 1 mill-about $400,000.) I worry, knowing that not all County citizens have rallied to a single vision for educational excellence. What will it take to pass a referendum?
The third factor is the disappointing news revealed at this week's school budget meeting. Real estate taxes are down by 2% from our budget estimate. Similarly, earned income and delinquent tax collections are down by 10%. This means an unexpected loss of $1 million this year (thus reducing savings we were counting on) plus it means we had better plan for less local income next year. We are also seeing big jumps in employment costs, with a state-mandated retirement jump of 40% leading the way. Even before we discuss factor # four (below), we are looking at a deficit of about $5 million for the 2012/2013 budget. (Despite rumors to the contrary, the Beaty repair project does not add to that deficit. Under QZAB funding the Board financed the repairs so that the bulk of repayments start, down the road, as we begin to pay off debt for older projects such as Youngsville. The Beaty repair project adds $10,000 to next year's budget.)
The fourth factor is the proposed charter school. Under state law our District must fund the charter school. Unfortunately, the state formula is "one-size fits all." When that formula is applied in this district, the superintendent's budget estimate is that the District (understand that to mean our non-charter students) loses about another $1.2 to $1.7 million. Yes, it is true that when a charter school opens, the District enjoys savings by not having to pay the charter school's utilities, staff, and supplies. But the District (which must fund the non-charter students) is still saddled with shared costs which do not decrease simply because the charter students moved. Those shared costs-like the superintendent's salary, debt payments for Russell Elementary and other past building projects, retirement payments for already retired teachers-must still be paid by the District.
Under the preliminary budget figures it appears that all of the District's students are more fairly served by keeping four high schools, operated by the District, rather than keeping three high schools and having a fourth operate as a charter school. (Again, if we think of it in terms of students, then non-charter students receive a smaller share of the funding pie because the state formula saddles "their" District with the higher proportion of the shared costs.) Which direction are we headed? That answer involves more than merely the pie-share consideration, and in the upcoming charter school hearings we will be learning about different viewpoints and factors to be considered.
In the meantime, however, our School Board cannot wait idly for those hearings. If we are going to consider the possibility of a referendum (which would happen in May, 2012), the law requires our Board to prepare a preliminary budget and make a referendum decision by mid-January, 2012. In other words, in the next few weeks, we are going to have to plan two 2012/13 budgets: one budget that assumes no new charter school, and a second budget that does. This is the first time we have started down the referendum path-the time allowed by law is short and most of the budget work and ideas will have to be done by the administration rather than the committee process we normally follow.
As to that administration, I am able to report that we are led by a young and energetic superintendent. Mr. Hufnagel is proving himself to be a man of creative ideas and a good communicator. We will rely on him heavily. While not overjoyed at our situation, Mr. Hufnagel has seen worse (his former district was one of the few districts hit harder than ours by the state's recent budget cuts). At our District, in the near term, he has instituted a spending freeze. For next year's budget he is looking at ideas old and new: salary freeze, renegotiating vendor contracts, etc. For the longer term he is discussing a plan that can fund the existing high schools while making some of the necessary building improvements.
This year's budget, the budget documents the administration is preparing for next year, the charter school application, the Dejong report, and a host of other information is available on our District's website. The Superintendent will publish his own, more detailed budget review, in the next few weeks. We invite you to stay informed.