Neal Culligan

TE School District has Multi-Million Dollar Budget Surplus … Again!

There was more to the June 17th  TE School Board meeting than the Board’s approval to cut the hours of aides and paraprofessionals.  With a 7-2 vote, the Board passed the District’s 2013-14 school year budget – Anne Crowley and Rich Brake dissented.

For another year, the District ended the year with a budget surplus – a year ago, it was a $3.9 million surplus and this year the surplus is higher, possibly as much as $5 million.  School board member Betsy Fadem defended the surplus, explaining that much of the surplus was due to one-time money situations.  Fadem’s logic may have been more convincing if it were not for the nearly $4 million surplus from the year before.

I understand that budgetary changes occur during the school year but the $8-9 million surplus of the last couple of years doesn’t balance well for me given recent Board decisions like the cutting hours of employees to avoid paying health insurance or the proposal to charge Valley Forge Elementary School neighbors a fee to use the tennis courts. How is that property-owning nonprofit organizations in our community are targets for District revenue or that taxpayers see an increase in their tax bill yet the school district has a yearly budget surplus of multi-millions?  This isn’t a few hundred thousand dollars in surplus, it’s millions!

My guess is that the teachers are paying very close attention to the District’s $8-9 million budget surplus that has occurred since  the signing of their last contract.  The TEEA contract is up June 2014, which means that contract negotiations are just around the corner.

Neal Colligan addressed the recently passed TESD budget in the latest issue of the Main Line Suburban.  Here’s his letter to the editor:

To the Editor:

Lost in last Monday night’s report on an emotional Tredyffrin/Easttown School Board Meeting was the economic news of the evening. This related to a summary of this year’s projected results and the adoption of budget for the 2013-14 school year.

As was announced the prior week at the board’s Finance Committee meeting, the district should see operating results this fiscal year that will show a surplus of $4 million to $5 million. Fiscal year 2011-12 (last year) ended with the district in a surplus position of $3.9 million. This is total surplus for the district of $8 million to $9 million in two years. It’s important to remember that the district imposed the maximum tax increases allowed in the Commonwealth (without voter referendum) in each of the last two years. These two tax increases totaled about $6.5 million in new revenue for the district. We were told that this was what was needed to educate our children in the next school year. The budgets adopted for those two fiscal years were each estimated to produce multi-million dollar deficits; even with the tax increases imposed. The reality is that there was enough revenue in each of these years to effectively operate our public schools without any tax increase. Looked at another way, our tax increases only ended up funding surpluses. This is a disturbing, and now repeating, pattern.

This year’s budget also included a tax increase. The presentation of the budget detailed, again, multi-million dollar deficits even with the now-adopted tax increase. This budget, as in the last two years, passed the board but not without dissenting votes. As it turns out, these dissenters in prior years were right voting against tax increases as they were not “needed” to educate our students. The old adage comes to mind: fool me once, shame on you; fool me twice, shame on me; fool me three times…? Let’s all hope this is not the case.

You may be asking the next logical question, what happens to these surpluses? They are accumulated in the district’s Fund Balance. This accumulation account is designated for many things; past untaken vacation days; stabilization of self-funded health insurance costs and a PSERS stabilization balance. Up until last year, the PSERS balance was the largest designated balance in Fund Balance. But it has never been used to protect the taxpayer from the increased expense of PSERS (the biggest demon the School Board uses to justify tax increases). Rather, the largest withdrawal from Fund Balance was taken last year and used to fund the Facilities operation. $10.4 million was moved from the PSERS stabilization designation and moved to a new Capital Fund. Unusual? You decide.

As with any operating entity in the public sector funded by our tax dollars, citizen diligence and attention is warranted. So let’s see what happens to this year’s projections of multi-million dollar deficits. We all hope it doesn’t play out that way but as a careful watcher of recent financial results; I’m not too concerned. The District has been widely wrong in its doom-and-gloom budgets in the recent past. Plus, they now have another funding increase in the form of your increased tax dollars. Will it be needed to educate our children or to create another surplus for the District? We’ll be watching…like a Hawk!

Neal Colligan
Wayne, PA

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