February 19, 2013 – Prepared Statement read during School Board Meeting by Superintendent Richard Sniscak
When we initiated our budget preparations for the 2013-14 budget in the fall, the Parkland School District was facing a projected deficit between revenues and expenditures of approximately $9.59 Million. This was not as significant of a deficit as the one we faced last year, which was in excess of $16 Million, but nonetheless this is still quite a challenge and not a desirable financial situation.
As part of Act 1 legislative requirements, a Preliminary General Fund Budget for the 2013-14 school year is required to be presented at this time for the School Board’s consideration and approval. This is meant to serve as a starting point in the budget process under the Act 1 Timeline. All public schools are required to adopt their final budget on or before June 30th annually. Therefore, we still have 4.5 months of work in front of us in our efforts to bring forward the most responsible budget possible.
I share this information so the public may better understand that this budget and the preliminary tax increase of 5.82% included in this preliminary budget is NOT going to be the percent tax increase included in the final budget in June. We could not, by law, pass this budget in June as we are only permitted by law to increase taxes by the Act 1 index assigned to Parkland plus any exceptions that are approved by PDE. In consideration of our current Act 1 Index plus exceptions, we estimate the maximum tax increase allowable for Parkland will be approximately 4.35%. However, in this economic environment, the administration cannot support and will not recommend a tax increase of 4.35% in June, it will be lower. The administration and the Board will continue to work to bring forward the lowest responsible tax increase in June while maintaining quality educational programming for all PSD students and maintaining a respectful balance in our taxpayer’s ability to afford it.
Last year we eliminated approximately 55 positions from our employee workforce (administrative, professional and support) which equated to gross savings of approximately $3.5 million, by eliminating and changing programs. Last year our administrators took a pay freeze and this year our teachers have taken a pay freeze. We participated in proactive means to save energy, converting the high school from oil to natural gas, reducing electric utility costs, saved $1.3 Million in bond refinancing and we still needed a tax increase in the end to balance the budget after utilizing approximately $3.4 Million of fund balance.
It is not easy for the administration to request the need for an additional tax increase. We will publicly share our budget cuts in greater detail later this spring but it will include cuts in personnel which will diminish our course/program offerings and organizational oversight. It will include additional cuts in athletics, equipment, supplies and we will be seeking a salary freeze from our support staff. Even with all of these cuts on the expenditure side we will still need a tax increase due to the significant challenges we face on both the revenue and expenditure sides of the budget.
Declining revenues, particularly commercial/industrial real estate assessment appeals has cost us approximately $5 Million the past 4 years and we stand to lose another $2 Million alone again this year in reassessment appeals. Building permits have slowed in this current economic environment which has also hurt our revenue. The state legislators rolled back their funding for public education to 2008-09 levels and have only restored $248,000 in Basic Education Funding in Parkland in this year’s proposed budget to date. Prior year funding reduced by approximately $900 Million Dollars in public education funds across Pennsylvania and about $900,000 Dollars in Parkland, including stimulus dollars.
Parkland initiated an Education Foundation last year as an alternative method to generate revenue, support programs and to lower the burden on our general fund budget and our taxpayers. The Foundation was able to raise $130,000 and award approximately $70,000 in Innovation Grants back to teachers to utilize in their classrooms with our children. The Foundation projects to raise another $200,000 again this year.
I share some of these examples with you to illustrate our efforts in various areas as we continually seek cost savings for our community members. The administration respectfully requests the Board approve our 2013-14 preliminary budget which will allow the administration to continue to work to minimize any proposed tax increase prior to adopting a final budget in June of 2013.
August 21, 2012
2012 – 2013 Commonwealth Budget for Public Education
The State of Pennsylvania announced their approved 2012-13 budget for the Commonwealth at the end of June. It contained level funding for public education, cementing the more than $900M that was cut from public education in the 2011-12 budget. In total, Parkland received $9,828,183 which will help pay for the Parkland School District’s approved General Fund Budget expenditures. The Parkland 2012 – 2013 school year budget was approved in the amount of $137,763,365 during the regularly scheduled Board meeting on Tuesday, June 19, 2012.
Concerns continue to mount over the fact that special education funding remains flat and has not seen any increase in funding for five consecutive years despite rising costs. The only increases in the budget went to support social security and pension liabilities, therefore there was no increase budgeted in support of classroom learning or student achievement. Concern continues about flat funding as other costs continue to soar, namely health insurance costs and general inflation that occurs in the costs to heat our buildings, gas for our buses, and the maintenance of our facilities as well as pension liabilities. A controversial voucher program was also enacted that will allow students from the lowest achieving schools in PA to attend private or nearby public schools.
EITC VOUCHER PROGRAM
The Pennsylvania Department of Education published a list of low-achieving schools in late July in which students, who live within the schools’ boundaries, may be eligible to apply for a voucher to attend another public, private or nonpublic school in 2012-13 through a newly created “Opportunity Scholarship Tax Credit Program” run through the Education Improvement Tax Credit (EITC) program.
The list of schools contains the lowest-achieving 15 percent of elementary schools and lowest-achieving 15 percent of secondary schools, based on combined math and reading Pennsylvania System of School Assessment scores from the 2010-11 school year. Career and technology centers, as well as brick-and-mortar and cyber charter schools, are not on the list.
The list of low-achieving schools contains 414 school buildings in 74 school districts across Pennsylvania. Students who live within the attendance boundaries of one of these schools are eligible if their household’s annual income is no greater than $60,000, plus $12,000 for each dependent member of the household. Income guidelines increase in June of 2013. For the 2012-13 school year, the maximum scholarship award available to regular education students is $8,500 and the maximum for a special education student is $15,000.
As with the regular EITC program, Pennsylvania businesses that donate to opportunity scholarship organizations are eligible for a tax credit through the program. The Pennsylvania Department of Community and Economic Development (DCED), not the Department of Education, administers the tax credit program and must approve participating organizations.
THE IMPACT OF THE EITC SCHOLARSHIP PROGRAM ON PUBLIC SCHOOLS
• The program siphons dollars from the general fund, via tax credits, that could otherwise be used for state-related obligations.
• Concerns are mounting about what happens to the children left behind in the “failing” schools who are not afforded a voucher? The program removes resources from schools that are tackling the challenges that exist in poverty-plagued communities.
• Money will go to pay tuition at private and nonpublic schools instead of going into the state’s general fund.
• Scholarships can go to students who are already attending private schools, as long as they meet the aforementioned income requirements.
THE IMPACT OF THE EITC SCHOLARSHIP PROGRAM ON PARKLAND
As Parkland just reduced staff to meet 2012-13 General Fund budget needs this past June, factoring in current enrollment along with new Kindergarten registrations, a large unanticipated increase in enrollment could potentially be disruptive to our budget and adversely impact class size numbers in our schools. Therefore, Parkland has opted not to participate in the EITC Scholarship Program and will not be accepting scholarships or students from the list of Opportunity Scholarship schools. Parkland also has a long-standing practice of not accepting tuition students from outside the District’s boundaries. Therefore, the program will not impact Parkland this year.