York School District Facing $15 Million Budget Deficit (PA)

December 6, 2010

The York City School District hasn’traised taxes for several years, but things could look much different for the2011-12 school year.

The district is facing a $15 milliondeficit, according to preliminary numbers.

"We’re in bad financialshape," said Sam Beard, school board president. "We’re going to haveto have a tax increase and make substantial cuts in our programming."
 
The deficit

Kenneth L. Medina, district businessmanager, said most districts start by looking at what it would cost to keep thestatus quo for the next school year wh ile trying to anticipate what revenuewill come.

Revenue is the hardest number topredict, he said. For the next school year, Top of Form

stimulus funding will no longerexist, and no one is sure what kind of state education funding to anticipateunder Gov.-elect Tom Corbett. Some districts expect education funding coulddrop back to its 2008 level, a significant decrease, Medina said.

Meanwhile, costs are rising. Salaries andbenefits are expected to increase by $7 million, in part due to a 20 percentincrease in health care costs, according to a presentation given to the boardrecently. Charter schoo l tuition is expected to increase by nearly $2 million.Debt payments will go up $1.5 million, among other costs.
 

Tax increases

The maximum tax increase thedistrict is allowed by the state for the 2011-12 school year is 2.2 percent,Medina said. Districts can seek special exceptions from the state to raise thetax rate by more than that, and "this may be the year we can use those,"he said.

The district’s fund balance has beenused to pad the budget in previous years and is now "precariouslysmall," he said. Stimulus funding also added cushioning for a few years,he said, but now the cushion is gone.

"The tough decisions were putoff for three years," he said.
 
Cuts

At a recent meeting, Medinapresented the board options for reducing the budget by about $11 million. Thoseitems included reducing money for textbooks, alternative education, stafffunded by stimulus money, and staff and programs funded otherwise.

The board and administration wouldhave to determine exactly where cuts would be made, Medina said.

The board is in the difficultposition of weighing "the needs of the community against the needs of thecommunity," Medina said, referring to funding education and consideringtaxpayers’ burden.

Beard said officials are looking atall options. Until the district knows what funding is coming in, they have toplan for the worst-case scenario, he said.

He noted that York Mayor Kim Braceyhas proposed raising city taxes, and that money for city and school districttaxes comes from the same pockets.

"With this economy no one wantsto raise taxes," he s aid. But "we have to look at what we have to doto continue with the education process."

Board member James Morgan saidFriday that he thinks officials should know how much is coming in beforediscussing cuts.

"You don’t want to alarmpeople," he said.

The district must pass a budget bythe end of June. If the district wants to try for exceptions to raise taxeshigher than the cap, a preliminary budget must be presented by Jan. 27, Medinasaid.

The York City School District hasn’traised taxes for several years, but things could look much different for the2011-12 school year.

The district is facing a $15 milliondeficit, according to preliminary numbers.

"We’re in bad financialshape," said Sam Beard, school board president. "We’re going to haveto have a tax increase and make substantial cuts in our programming."
 
The deficit

Kenneth L. Medina, district businessmanager, said most districts start by looking at what it would cost to keep thestatus quo for the next school year while trying to anticipate what revenuewill come.

Revenue is the hardest number topredict, he said. For the next school year, Top of Form

stimulus funding will no longerexist, and no one is sure what kind of state education funding to anticipateunder Gov.-elect Tom Corbett. Some districts expect education funding coulddrop back to its 2008 level, a significant decrease, Medina said.

Meanwhile, costs are rising.Salaries and benefits are expected to increase by $7 million, in part due to a20 percent increase in health care costs, according to a presentation given tothe board recently. Charter school tuition is expected to increase by nearly $2million. Debt payments will go up $1.5 million, among other costs.
 
Tax increases

The maximum tax increase thedistrict is allowed by the state for the 2011-12 school year is 2.2 percent,Medina said. Districts can seek special exceptions from the state to raise thetax rate by more than that, and "this may be the year we can use those,"he said.

The district’s fund balance has beenused to pad the budget in previous years and is now "precariouslysmall," he said. Stimulus funding also added cushioning for a few years,he said, but now the cushion is gone.

"The tough decisions were putoff for three years," he said.
 
Cuts

At a recent meeting, Medinapresented the board options for reducing the budget by about $11 million. Thoseitems included reducing money for textbooks, alternative education, stafffunded by stimulus money, and staff and programs funded otherwise.

The board and administration wouldhave to determine exactly where cuts would be made, Medina said.

The board is in the difficultposition of weighing "the needs of the community against the needs of thecommunity," Medina said, referring to funding education and consideringtaxpayers’ burden.

Beard said officials are looking atall options. Until the district knows what funding is coming in, they have toplan for the worst-case scenario, he said.

He noted that York Mayor Kim Braceyhas proposed raising city taxes, and that money for city and school districttaxes comes from the same pockets.

"With this economy no one wantsto raise taxes," he said. But "we have to look at what we have to doto continue with the education process."

Board member James Morgan saidFriday that he thinks officials should know how much is coming in beforediscussing cuts.

"You don’t want to alarmpeople," he said.

The district must pass a budget bythe end of June. If the district wants to try for exceptions to raise taxeshigher than the cap, a preliminary budget must be presented by Jan. 27, Medinasaid.