2010-11 School Budget Reflects Hard Work and Tough Choices

Tredyffrin/Easttown’s School Board voted to pass the district’s 2010-11 budget at its final meeting of the school year on June 14. After more than six months of hard work, collaboration with Superintendent Waters and district administrators, plus input from the community, the vote of the 9-member board was unanimous.

2.9% Property Tax Increase

The budget authorizes $107,581,180 in spending and includes a 2.9% property tax increase. This is the fifth year the School Board has voted to tax at or below the Act 1 index. But in agreeing to limit the tax increase to .5 mills or $2.46 million in revenue, they faced the unprecedented challenge of finding an additional $6.8 million in budget cuts or revenue enhancements in order to balance the 2010-11 budget.

Administration and Staffing

In response to the projected $9.25 million budget deficit, Dr. Waters and his team proposed 68 strategies to cut costs or enhance revenues. Their objective was to maintain the quality of educational programs and essential services in accordance with the District’s Strategic Plan, while keeping spending in line with declining revenues.

Over the last three months all of the cost-cutting strategies have been discussed publicly and 39 approved for the 2010-11 school year, for a total savings of $5.3 million.

An additional strategy was approved at the June 14 meeting–a modification in staffing practices that will affect grades K-6. Going forward, new professional staff will be hired only after all classes within a grade level reach the District class size limit. The impact: there will be one more student in 20% of K-6 classrooms. The District’s policy on class size has not changed, and no staff reductions will be necessary to implement this change due to teacher retirements. This change in hiring practices will save the District at minimum $220,000 next year and more in future years.

Bond Issue for Capital Projects

Finally, to close the budget gap, the Board approved a drawdown of about $1.5 million from the district’s fund balance. And in order to preserve the remaining fund balance, the Board approved the issuance of $14,507,000 in general obligation bonds to finance planned capital projects during the next three years. At the same time, the District refinanced $8,995,000 in existing debt for a savings of $377,000. Go to http://www.tesd.net/budget2.htm for more information.

Finance Chair, Kevin Mahoney, defended the decision to finance capital projects instead of raising taxes in the current economic climate. He explained, “The fund balance represents the taxpayers’ money, and it should be used strategically. Future taxpayers will share in some of these expenditures.” Mahoney pointed out that the District’s $18 million reserve will be needed in future years when tax increases allowed under Act 1 are reduced and the District’s pension obligation increases.

House Bill Could Impact Pension Obligation

Regarding the District’s sizable increase in pension obligation beginning in 2012, there is legislation currently pending in the state House that caps employer contributions to teacher (and state) employee pension plans–House Bill #2497. School Board member Karen Cruickshank urged T/E residents to write to State Representative Paul Drucker in support of the bill. This bill does not address the gaping hole that is the unfunded liability, but it could reduce TESD’s pension obligation by $4-5 million annually in upcoming years. Find out more at: http://www.pennlive.com/midstate/index.ssf/2010/06/pennsylvania_house_poised_to_v.html