Last night was TESD School Board meeting with discussion of the proposed 2010-11 district budget as the major agenda item. I was attending a DuPortail House Board meeting and as always, I thank my friend Ray Clarke for attending the School Board meeting and then for sharing his notes with us. For Ray and any other who attended – I am curious what was the resident turnout like last night? Staff, teachers, parents in attendance? Many comments from the audience members?
It looks like the unfunded pension program (PSERS) problem is looming ever closer on the horizon . . . wonder if there is time before the Primary next week to have a statement from the local candidates on their proposed solution to the problem? If not before the Primary Election, I do think that we need to have public dialogue before the November General Election and know where the candidates stand on this important economic issue facing the Commonwealth.
Update from the School Board meeting budget discussion
First, a quick appreciation for District Business Manager Art McDonnell. His presentation tonight was very clear. He always seems to be on top of the details, and the budget process has chewed through a lot of those details.
The proposed budget passed with one change: removal of the $80,000 of revenue estimate for the Activity Fee. The consensus being that there is not enough time to sort through and socialize all the details for the upcoming year, but that such a fee should be considered for 2011/12. The lost $80,000 will come from the fund balance.
Board members Brake and Bookstaber proposed amendments that would slightly lower the non-contract compensation increase (to 2%) and the property tax increase (to 2.5%), but received no other votes. I’m not sure that I buy the arguments against the former, but I can see how the $7 million deficit for 2011/12 would weigh on the decision to tax at the Act 1 index. That shows how important it was for the Board to vote not to apply for exceptions back in January, forcing the expense reductions.
The good news is that Moodys affirmed the district’s AAA rating, even considering the dire financial outlook for 2011/12 and especially beyond. Now seems to be a good time to borrow what we can to assure funding to keep the facilities going, while the District tries to figure out how to offset the remaining contracted salary increases and benefits entitlements. Beyond that, hopefully new contracts will reflect the community’s own compensation experience and ability to pay. The notion of above-inflation compounded annual salary level and tenure increases is – to use a word popularized at the meeting – unsustainable.
Those actions will not address the retirement plan problem, though – a net $6 million contribution increase in 2012/13 and another $3 million on top of that in 2013/14 – by which time the fund balance would be wiped out, even with inflation-linked tax increases.
This leads to one of the most critical questions for our prospective state representatives: what – specifically – would you propose to address the unfunded pension liability? What changes in benefits? What changes in contributions, employer and employee? What aid to school districts, and from what source? Let’s hear from them.