Facing a $3 million gap in the 2012-2013 budget, Centennial officials have placed higher tax rates and staff reductions on the table to balance the ledger.
Prior to Tuesday night's finance committee meeting, Berdnik posted what he calls an "armageddon" projection of staffing cuts, a worst case scenario that sees the district shedding 60 positions. He says that the final number is highly unlikely, but with the consolidation of Stackpole to the new and Longstreth to , teacher and support staff cuts are inevitable.
"If I had to cut right now to make the budget work, it would be about 35 positions," said Berdnik, figuring a $4 million deficit divided by an average $120,000 salary + benefit teacher expense.
Salary, benefits and contributions to the Public School Employees' Retirement System (PSERS) account for approximately 70 percent of Centennial's budget. Since the PSERS expenditure is a percentage mandated by the state, the most impactful spending cuts come from teacher/support staff salaries and benefits.
Berdnik has worked to reduce spending in other categories, including several of the 500 recommendations made by the Pennsylvania Association of School Business Officials (PASBO). The push for more efficiencies in day-to-day operations creates pocket change when compared to the sizable dent that teacher cuts would make.
The challenge for Berdnik and the rest of the school district is ensuring that the educational value for the students does not diminish from the cuts. The findings presented tonight at 7 p.m. by the ad hoc committee on class sizes will be taken into consideration during the decision-making process.
The 2012-2013 revenue projections anticipate a tax increase of 1.7 percent, or 1.93 mills, adhering to the Act 1 requirements. Berdnik will also apply for two Act 1 exceptions that add an additional 2.37 mills, or a total tax increase of 3.79%. A mill equals a dollar tax on every $1,000 of assessed property value.
The Pennsylvania Department of Education (PDE) allows districts to apply for exceptions to Act 1 tax requirements in four instances:
- Grandfathered debt from school construction: If there is outstanding debts for school construction projects.
- Electoral debt from school construction: Costs associated with paying principal and interest on any voter-approved debt, qualify for an exception.
- Special education expenditures: If a portion of a special education cost increase exceeds the district’s special education state funding.
- Retirement contributions: If a school district’s increase in the amount of the estimated payments for PSERS between the current year and the upcoming year, as determined by PDE, is greater than the index.
The two that Centennial plans to adopt are the grandfathered debt and retirement contributions.
According to state requirements, the district must apply for the exceptions by Feb. 2. Requesting the exceptions does not mean they are automatically enacted; the school board still needs to vote on whether to pull that lever. However, Berdnik has baked in the additional $1.2 million of revenue generated by the exceptions, meaning if they are not implemented, the $3.3 million deficit grows to $4 million.
Berdnik says that pending sources of revenue have not been added to the budget, mainly from real estate transactions. State rquirements mandate that revenue from building sales must go toward either debt payments or capital projects.
The paperwork for the approved $300,000 sale of the Dorothy Henry Satellite School to Ivyland Borough has yet to be finalized. Berdnik says that a good offer has been made for the property, but he won't disclose the amount or the buyer until it is presented to the school board. The school board also has to give final approval to put the and properties on the market. Berdnik expects that vote to occur at the Jan. 24 meeting.