While a final budget will not be adopted until late June, the Warren County School District projects a starting deficit of $4,587,434 for the upcoming 2014-2015 fiscal year.
The district's board of directors approved a state-mandated proposed preliminary budget during its monthly meeting Monday night at the Warren County Career Center.
"This is the 40,000-foot position," said Superintendent Dr. William Clark of the proposal. "We're not down in the trenches. (We are) trying to predict a lot of things that will be impacting us in July."
Some of those outliers, Clark explained, include hold harmless, an automatic two percent increase in state education funding, the governor's budget which will be released next month, federal aid as well as tax re-assessment and non-profit assessment issues that cannot be clearly defined at this point.
Business Manager Jim Grosch reported total projected revenue at $66,981,545, which does not include any tax increases. Expenditures are projected at $71,568,979.
"We're coming in with a starting deficit of $4,587,434," said Grosch.
According to a presentation prepared for the meeting, some of the big ticket spending increases include over $1 million in salary increases, a 25 percent jump in the district's state retirement contribution that amounts to $1,536,000 as well as an increase in health care costs projected preliminarily at $678,000.
"There are many things in this early stage of the budget process that we have not delved into yet," said Grosch. "Some of them we can't know the budget impact yet."
The Pennsylvania Department of Education governs how much local school boards can increase local tax rates. This year's permitted increase, according to Grosch, is three percent or 1.53 mills, which will generate slightly over $600,000 in additional revenue. The state does offer some exceptions that permit increases above the index, such as to cover retirement expenses, but Grosch said that the state has yet to open the window in which the district could apply for such exceptions.
The budget proposal leaves open the option of pursuing such exceptions and going above the index if needed. The board elected not to act on a motion that would have prevented the district from taking such action.
Solicitor Chris Byham said that the action allows the district to make a preliminary budget available to the public but "what it does is keep the door open" and "allows for referendum exceptions."
"I believe last year the board took no action on the resolution saying we were not going to raise taxes above the index," said Grosch. "From my perspective, that gives us time. (It) does not put you in a corner. (It) gives us time to get all the cards on the table, if you will, and make sound decisions."