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TE School District

Last night’s TESD Finance Committee Meeting was important. We learned through the following notes of Ray Clarke that the district is facing as much as an $8.5 million funding gap for 2011-12. Much discussion on how to prepare for this looming budget gap . . . imposing an Earned Income Tax, increase in property taxes, educational program and staffing cuts? The meeting last night was the precursor to next week’s independent, public discussion of Earned Income Tax, what is it, how would it work, who will it affect – there is much misinformation on the subject of EIT and looking forward to the presentation of October 18.

I agree with Ray, wouldn’t we all like to know how our state house candidates would suggest funding the school district’s looming muli-million dollar funding gap? My guess is that Paul Drucker and Warren Kampf will remain mum on the subject . . . viewing that any ‘discussion’ of imposing an Earned Income Tax, an increase property taxes or cutting of programs would be the kiss of death 3 weeks before Election Day!

Here are Ray’s notes from last night – thank you Ray!

Update from last night’s TESD Finance Committee Meeting:

My own selection of highlights.

Next year’s $7 million gap looms large (this year seems under control). Expenses are pretty much locked in: contracted salary increases and no option to save costs through program changes unless through staff attrition. Administration is revisiting the strategies from last year, of course. On the Revenue side, there are a couple of built-in threats:

$1 million of investment earnings based on a 2% return when the current investments are earning less than 0.5%. Gap at least $0.5 million

$2.7 million of transfer taxes based on the rolling average formula, but the estimate for this year is $1 million less than that.

So, how to fill a gap that may be as high as $8.5 million? The Act 1 property tax increase is set at 1.4% ($1.2 million), and exceptions if approved would be roughly $1.6 million – a total property tax increase (unless a higher one was approved by voters) of 3.2%. Still $4 million short of today’s base projected expenses.

Key questions:

How much of the gap can be closed through another round of expense reductions? The administration believes that the well is running dry. A young teacher corps (no built in halving of salaries or program changes as older teachers retire), and items like supplies already cut back to 2008/9 levels.

Is an EIT an alternative on the revenue side? Bring back to T/E the $4 million (my guess) being paid to other townships? Maybe link that with a cap on property taxes?

There are many questions about the EIT, of course. Hopefully next Monday’s meeting (at Conestoga HS) will help answer them. The Finance Committee (rightly in my opinion) is designing this as an information session – with presentations about the tax, the financial impacts and the process – NOT an advocacy session. The place for that will be the Board Meeting the following week when the decision is made on whether to give non-binding notice to the Townships of the intention to put an EIT on next year’s ballot. Hopefully the process at the meeting will allow for questions of data clarification, but not opinions.

So if the EIT does get all the way to the ballot, the choices would get complicated. (That is hopefully what the session will explain). For example, voters may have to approve/reject a property tax increase of say 8%, approve/reject an EIT of say 1%, or if neither then we’ll get a property tax increase of 3.2% and withdrawal from the Fund Balance. As I have stated here before, I’m an advocate of the EIT solution (after rigorous examination of expense options), for many reasons.

For those who believe that these choices represent too little say on what is actually spent to educate our children, it was suggested that our state representatives have an important role to play.

Should a local district be able to adjust expenses to levels it can afford? How many state mandates are appropriate?

How can the pension problem be resolved?

Wouldn’t it be nice if Drucker and Kampf could debate these issues?

TESD School Board Member Kevin Mahoney Says District Budget Could be 15% Over Budget in 2 Years if Pension Contribution Rates Don’t Change

September 1, 2010

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Interesting article in Daily Local newspaper by Dan Kristie (see below). TESD School Board Member Kevin Mahoney says the school budget could be 15% over budget in 2 years if the pension contributions rates don’t change. According to Mahoney, the only way to deal with the increasing pensions costs is to pass a large real estate tax increase! Comments . . .

Retirement System’s Cost to Rise Dramatically Soon

By DAN KRISTIE, Staff Writer

This is a dramatic increase, considering the district’s 2010-11 budget was $203 million and 60 to 70 percent of the district’s expenses are dedicated to salaries and benefits — a percentage that, because of contractual obligations, is difficult to reduce or change.

Schools across the state are facing similar increases in their retirement system contributions, and their budgets are similarly constrained.

School officials in Chester County expect the state Legislature will — somehow — adjust the retirement system so the increases will be less dramatic. But even if reforms are implemented, the retirement system remains dramatically underfunded. Local officials doubt any state-level solution to the PSERS crisis will save their own school districts from all the retirement system-related pain.

Officials are reluctant to speculate about what will be on the chopping block once the increased retirement system contributions come into effect. The consensus, however, is that if the increases are anywhere near as large as projected, educational programs will be affected.

Kevin Mahoney, the chairman of the Tredyffrin/Easttown School Board finance committee, said that if required PSERS contribution rates do not change, his school district in two years will be 15 percent over budget.

This will be the case, Mahoney said, even if Tredyffrin/Easttown sees no other cost increases except for a small increase in the cost of benefits. Mahoney added that the district is required by law to pass a balanced budget.

“You can only do that by increasing class size or eliminating curriculum choice,” Mahoney said. The other way for districts like Tredyffrin/Easttown to deal with the increased PSERS rates would be to pass a large real estate tax increase.

Act 1 is the state law that limits how much school districts can raise property taxes. Act 1, however, allows districts to exceed the limit in order to cover mandated pension contributions. Act 1 also allows districts to hold referendums if they seek to raise taxes beyond the limit.

Local school officials said Act 1 taxpayer referendums are extremely unlikely to pass in Chester County, given the economic climate and the mood of the electorate here. And, officials said, school districts would be unlikely to try to use Act 1 exemptions to pass the PSERS increase off to taxpayers.

“[The West Chester Area School] board has made it pretty clear we’re not taking exceptions,” said Jim Davison, the chairman of that school board’s finance committee. He added that the electorate in West Chester Area would never go for a referendum.

“I have no confidence in a referendum passing in this district,” Davison said. Davison, like Mahoney, said he believes his district’s educational programs could be in jeopardy if the state doesn’t reform the retirement system. He said, however, that West Chester Area will try to make other types of cuts — to facilities budgets and energy use, for example — and hope for the best from the state-level retirement system reform effort.

“But I don’t know if we can make enough of those types of cuts so we don’t impact the classroom,” Davison said. “That’s the million-dollar question. We may end up impacting the classroom — increasing class size, getting rid of programs.”

Bill Fagan, the chairman of the Downingtown Area School District finance committee, used the metaphor of a series of concentric circles to describe how the retirement system crisis might affect his district. “When you look at the concentric circle with the children in the middle, the farther out you get from that circle, those are the types of programs … more likely to be cut,” Fagan said.

Fagan said he was unwilling to speculate about precisely what type of programs would fall on the outer circles. But, he said, he hoped Downingtown Area could deal with the PSERS crisis without negatively impacting the classroom.

The state legislature in July voted to reduce the 2010-11 retirement system employer contribution rate from 8.22 percent to 5.64 percent, meaning school districts will be required to contribute less than expected this year to the fund.

Local officials said that, in the absence of other action, this only delays the retirement system crisis. “The state has been unwilling to change the benefit program,” Mahoney said. “We keep seeing this ski slope curve in front of us, and whenever we get close to it the state has changed the discount rate, which just makes the curb steeper but farther away.”

Residents on Old Lancaster Road Have New Concern . . . Raised Crosswalks

August 22, 2010

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This is a cautionary tale . . .

I received an email from a Berwyn resident asking that I add a warning to drivers on Old Lancaster Road in regards to recently installed raised crosswalks. She indicated that there were 2 crosswalks; one in front of the Timothy School and the other much more elevated crosswalk was installed down by TE Middle School. She described a car losing its oil pan when the driver went over the elevated crosswalk — car had to be towed as a result!

Wondering why a crosswalk would be raised to the level that was causing car damage, I drove to Old Lancaster yesterday to see for myself. First I came to the Timothy School crosswalk and although there was no warning signs to indicate the elevated crosswalk, it didn’t seem to be out of line in scope of construction.

But then I drove down to the other crosswalk down by the middle school. All I can say is WOW . . . never saw this kind of walkway (nor apparently have the residents or the car drivers I spoke with on Old Lancaster). Not only is this crosswalk elevated at a higher level than usual, the angle of the elevation is a very steep incline for cars. And the width (or length) of the crosswalk seems very long . . . it must be a car and a half long.

There are no blinking signs, no flourescent stripes on the road, no warning whatsoever when you approach this elevated crosswalk. I spoke to one driver who said he had scraped the under part of his car and wanted warnings on the road immediately. One of the residents living next to the elevated crosswalk says that she is awaken at night by cars scraping the crosswalk. I had several people stop by and ask me who was responsible for the crosswalk . . . was it the township public works, PennDot, who? I assume that the crosswalks are part of the sidewalk project but I don’t know who installed the crosswalks. I would think there is a standard for elevated crosswalks, inspection and approval procedures — someone must have OK’d this crosswalk as safe, right?

The photos really do not indicate the significance of the problem. One mother and her son who live nearby tried to stand in such a way on the elevated crosswalk so as to indicate the level of elevation. (photo on the left) Both sides of the road surface of the crosswalk already have deep gouges in the asphalt where the bottom of cars have scraped.

It was fascinating that local residents stopped to talk to me as I was taking my photos. All had much to say; one older couple in the white SUV kept backing up and down on the crosswalk so that I could get the severity of the incline. (But again, I don’t think the photos do the situation justice). Seriously, there needs to be warning lights, signs, some kind of notice for drivers . . . school is going to open soon and this situation is dangerous.

I do have a question — if the raised crosswalk was another form of traffic calming (as some suggest as the reason for the bump-outs) why is the TE Middle School crosswalk significantly more elevated, wider and with a steeper incline than Timothy School crosswalk? They are located minutes apart on the same road . . . very strange.

Bottom line . . . assuming that the crosswalks are standard and constructed to code, I contend that there needs to be some kind of warning or signage for drivers.

Ray Clarke Provides Notes from TESD School Board Meeting & Budget Approval Process

June 15, 2010

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My friend, Ray Clarke once again has not let us down with his detailed notes and commentary from the TESD School Board meeting. Posting the agenda from last night’s meeting, I noted its 101 pages so I have a feeling that last night was long and tedious. Which makes me all the more grateful that Ray attended, took notes and then provides us with his thoughtful remarks. Thanks Ray!

I was particularly interested to know that PSERS was discussed at the meeting. The large white elephant in the room, we’d all like to hope that PSERS goes away or somehow just self-corrects but we know that’s just wishful thinking. PA House Appropriations Chair Dwight Evan’s proposed legislation addresses PSERS, but appears to be a delay tactic where the major liability to the taxpayers remains. But I suppose one could say his bill is better than nothing . . . which is where we currently are on the subject.

At the end of Ray’s notes he asks for State House candidates Drucker and Kampf to weigh in, but my experience says that will be doubtful. Unfortunately, my discussions with politicians anymore seem to be laced with an ‘it’s off the record’ remark . . . but maybe these candidates will surprise us!

Read over Ray’s comments from the meeting and please provide your thoughts. Any other readers attend the meeting, if so, please weigh in with your comments.

The School Board passed:

The 2010/11 budget with a 2.9% property tax increase, as developed and communicated over the past six months

Issuance of $23.6 million of bonds at “record low interest rates” – but which will still cost $36.7 million to repay over the next 15 years. Part will be used to advance refund existing bonds, which will save $170,000 next year and have a total net present value savings of $377,000 over the next dozen years. Note that the savings are front-loaded, extra costs come in the out years (see later, re PSERS……)

A bid to demolish the ESC, leading to a total project cost of $450,000 – about half the working estimates, which is very good news. The work to take place at the end of the calendar year.

Modifications to the K-6 class sizing practice that will save three teaching positions next year and more later, while remaining in accordance with current staffing policy. The implementation enabled by more recent resignations than expected.

A bid for printing services to replace the print shop currently housed in the ESC. Important to note that the budget strategy to save $84,000 did not explicitly articulate the $52,000 cost for the outsourced services, although apparently that cost is included in the budget. There was an agonizing 15 minute discussion while the Board and Administration talked all around this without facing up to it.

Interesting update about PSERS: PA House Appropriations Chair Dwight Evans has introduced a bill to implement a Rendell plan to delay the increase in employer (= taxpayer) contributions to teacher and state employee pension plans. Basically this limits the rate of increase of contributions via “collars” on the percentage of payroll that the taxpayer would have to contribute. Here’s an analysis:
http://www.paindependent.com/todays_news/detail/alternate-state-pension-plan-would-cost-8-billion
From some of the numbers floated, I guess this would provide TESD with at least a $5 million annual expense saving (vs the current forecast) in the problem years coming up.

But of course, the liabilities are still out there, so, to quote another website:
http://www.pennsylvaniavotes.org/forum/forums/p/149/300.aspx#300:
“An actuarial note attached to the bill by PERC (the PA Public Employee Retirement Commission) estimates that the higher costs in later year will far outweigh the contribution reductions in earlier years – to the tune of an astonishing $52 billion over 30 years. That is an additional $52 billion that taxpayers – through higher state and school property taxes – will have to fork over to pay off the pension obligations, and this assumes an 8% annual return on investment.”

This bill is being compared to refinancing a mortgage, which is not a bad analogy. Continuing with that: the plan does of course completely fail to address the fact that the principal (the public sector pension liability) vastly exceeds the market value (= pensions valued at private sector levels). Not a thought being given to writing down that liability!

For how long will voters put up with the union stranglehold on the legislature? At some point the economic pain will become overwhelming. What do our current and would-be representatives think about this?

North Penn, Montgomery County Teachers Set to Strike Monday . . . Could this be a sign of the times?

April 17, 2010

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Many of the area school districts are in their final discussions for the 2010-11 budget, include Tredyffrin Easttown School District. As the school year is starting to wind down, there is news that the North Penn teacher’s union in Montgomery County has made the decision to strike starting at 7 AM this Monday. North Penn School District is a large sprawling district with over 13,000 students. Are the actions of the North Penn School District’s teachers a sign of the times?

If I understand the teacher union’s case correctly, the teachers told the North Penn school board what they were willing to accept in the contract negotiations. However, the school board voted unanimously to reject an arbitration award from the arbitration panel mediating between the district and the teachers.

The teacher union and the school board put a spin on the proposed contract differently. The teachers union report that their proposal included a $43.4 million salary increase, 23.5% annual payroll increase over the next five years of the contract. According to the school board, the proposed teacher contract ignored the fact that the proposed teacher’s contract would increase the current district budget by over 17.3% and as a result require residents to pay an approximate 25.4% increase in property taxes over the five years of the contract. The teacher union is disputing these tax hike numbers presented by the school board. North Penn union president Alan Malachowski argued, “The salary increase in the first year was a 0, which our teachers overwhelmingly said was OK, and beyond that were yearly increases of 2.5, 2.5, 2.8 and 2.8 percent, very modest salary increases that they know they can afford.”

For comparison sake, the current North Penn salary schedules for 2009-10 starts at $42,870 and ends at a maximum salary of $93,948 (the same as in the base year of 2008-09). The proposed increase allows for a starting salary of $49,518 to maximum salary of $104,410 in 2013-14. How do North Penn’s teachers salaries compare to T/E School District?

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From our own school district . . . the TESD Finance Committee Meeting is scheduled for this Monday, April 19, 7:30 PM at Conestoga High School auditorium. Here is the Finance Committee Meeting agenda— interesting to note that the Earned Income Tax (EIT) is listed as an agenda item.

TESD’s Finance Meeting Looms . . . What will be the resolution on the school district’s budget deficit?

April 14, 2010

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The school district’s Finance Meeting was changed from this week to next Monday, April 19. The timeline for final resolution on the 2010-11 school district budget is counting down. Where do we stand with the budget discussion? The TESD 2010-11 budget has a substantial deficit — salaries and escalating pensions and health care benefits are driving the expenses upwards. The District has some hard decisions to make about these current and future District benefits.

At the March Budget Meeting, there was EIT vs. PIT (Earned Income Tax vs. Personal Income Tax) discussion. It was agreed there would be follow-up information provided at the April 19 Finance Committee Meeting. If I recall correctly, PIT is not a possible solution but Earned Income Tax is under consideration. Previously, on Community Matters, there was much discussion about the teacher unions and their contracts. Opening the teacher contracts as part of the budget discussion, is not possible, correct? Administration salaries are also off-limits, correct? This upcoming finance meeting could present one of the last opportunities for the community to weigh in; I know that several of the school board members follow this forum and your comments, so I suggest that we get some discussion going . . .

As an aside to the school budget discussion, I want to include the following Philadelphia Inquirer article. About a month ago, Inquirer writer Dan Hardy called me about the FLES program (foreign language in the elementary schools). He was writing an article on the program and how school districts reportedly were cutting this program to help reduce budget deficits. Dan’s article appeared in the Philadelphia Inquirer this week and I have posted it below.

Grade schools consider cutting foreign language classes

By Dan Hardy
Inquirer Staff Writer

Students in Madame Maria Wells’ fifth-grade class at Cynwyd Elementary School were having great fun Thursday morning – while learning French at the same time.

Through songs, games, and discussion, mostly in French, Wells taught anatomy vocabulary words to the Lower Merion district children, now in their fourth year of instruction. The class, which meets three days a week, also talked about English words that have their origins in French terms.

“The connections between French and those words helps me remember them and know what they mean,” student Benjamin Nagle said.

“It’s great to be able to speak French,” said classmate Belle LeBow.

Not many public school elementary children in Philadelphia and its Pennsylvania suburbs get that experience.
Fewer than 10 of the 64 districts teach foreign language in the primary grades. Some programs are very limited, with only a few minutes a week or only a few grades.

Now, more districts are getting ready to say au revoir to those classes. Tredyffrin/Easttown; Springfield, Delaware County; and Great Valley are tentatively planning to drop them next year.

The Unionville Chadds-Ford district had intended to start a full program in its grade schools this year. But the recession forced it to shelve the plan in favor of one that uses teachers and parent volunteers a few times a month. Three districts – Haverford, Wallingford-Swarthmore, and West Chester – eliminated elementary language classes in the last few years.

Few contest the key role elementary education can have in foreign-language proficiency. Classes in lower grades are vital to achieving good pronunciation and fluency by the end of high school, experts say. Studies show that foreign-language instruction correlates with increased English language ability and general academic performance.

But nationally, the percentage of schools with elementary level language programs fell from 24 in 1997 to 15 in 2008, according to the Center for Applied Linguistics, a Washington-based nonprofit. Pennsylvania officials do not have an exact count, but said the number of districts with some kind of elementary language instruction is holding fairly steady at between 150 and 175.

For area high schools, The Inquirer’s Report Card on the Schools, released Sunday, found that nine suburban districts dropped one or more languages and six others added them since 2007-08. In Philadelphia, about half a dozen high schools dropped at least one language and about the same number added one.

New Jersey is one of only 19 states that has a foreign language high school graduation requirement; Pennsylvania does not. New Jersey also requires that every elementary school teach foreign language.

The three Pennsylvania districts proposing to cut their elementary programs all cited the same reasons: time and money. Tredyffrin/Easttown, Springfield, and Great Valley officials said that it was impossible to spend enough time on them to make it worthwhile, and they could realize savings by starting the instruction in the higher grades. In the Tredyffrin/Easttown school district in Chester County, the elementary language program, started in 1998, has been a signature program. “We believe that learning a foreign language in the elementary school is an essential part of a child’s education and development,” the district’s Web site says.

But the program – with 45 minutes of class time for first through fourth graders twice every six days – is likely to be cut. “If we want proficiency, we would have to increase instruction, and we don’t feel we could do that at this time,” said curriculum director Richard Gusick, citing competing demands from other subjects.

The district will beef up its program in grades five to 12, Gusick added, saying that “language proficiency remains a goal.”

Another factor for the proposed cuts is a $9.25 million budget deficit the district faces for next school year. Dropping the program would save $378,000, he said. That proposal brought hundreds of parents out to board meetings; more than 600 signed an online petition asking that the program be spared.

One was Tredyffrin resident Cristina McLachlan, the mother of three elementary schoolchildren and a Spanish teacher at a private school. “Everybody is trying to become more global and countless studies have showed that the earlier children are exposed to a foreign language, the easier it is for them to learn it,” she said. “When you go to Europe or South America, every educated person speaks two languages, or three or four – we’re the exception. . . . It’s a huge step backward in a school district that everyone considers to be so good – it’s absurd . . . it’s a mistake.”

In the Lower Merion District, support for the program remains strong, said Jack Maguire, supervisor of Humanities programs. “The educational benefits and the intellectual benefits for the kids are immense,” he said. “There is no need to justify this to the community – they understand the importance of this to their children’s education. . . . There’s never been a whisper that the program is in trouble.”

Mt. Pleasant Town Hall Meeting and TESD School Board Meeting Tonight!

March 22, 2010

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The much anticipated Mt. Pleasant Town Hall meeting is tonight. This meeting has been a long time in the works; previously cancelled twice due to snow. The community meeting will be held at the First Baptist Church on Upper Gulph in Mt. Pleasant, 7 – 9 PM. Many of us have heard Christine Johnson at Board of Supervisors meeting speak passionately about issues facing her Mt. Pleasant neighborhood. Tonight should present an opportunity for residents of this panhandle community to voice their opinions and concerns.

Tredyffrin Township Police Officer Larry Meoli has help to organize this meeting with Mt. Pleasant residents. Attending the meeting will be members of the Board of Supervisors and representatives from the township staff, zoning and police departments. Liaisons from the Board of Supervisors will be supervisors DiBuonaventuro, Kichline and Richter. Having just recently written about the Sunshine Law, I now understand that if more than three supervisors attended tonight’s town hall meeting, that would be viewed as a violation. I will be attending the Mt. Pleasant meeting and look forward to the exchange of information. I will provide an update tomorrow on Community Matters.

Tonight is also the Tredyffrin Easttown School District monthly school board meeting. Here is the TESD agenda.The agenda is very detailed (117 pages). In reviewing the agenda, I did note the resolution from the school district in regards to the Pennsylvania Public School Employees Retirement System (PSERS). Much has been written about PSERS and the escalating associated costs; I am pleased to see that TESD is supporting pension reform in the state! (I am hopeful that my friend Ray Clarke will be attend tonight’s TESD meeting and will provide his remarks.)

Economics Driving TESD's Budget Woes . . . EIT to Be Explored

March 16, 2010

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Ray Clarke attended the TESD Budget Workshop last night and provides the following commentary. I am fascinated that the school district is bringing EIT out of hiding. There is much misunderstanding about Earned Income Tax – we need an open and thorough airing of EIT. I would suggest that the TESD and township partner for the discussion, have an outside expert give a presentation (like Easttown Twp did for its residents). The presentation should be taped and then shown repeatedly on both the school district and township cable networks. Some people hear ‘tax’ in the Earned Income and then simply shut-down.

Whether it is the township or the school district we are talking about — we are currently facing tremendous economic hardship and all revenue sources must be explored. Personally, I don’t want to pay more taxes and my personal household will suffer with EIT (my husband works for Unisys) however, . . . there is also a reality to the situation. I applaud the School Board for recognizing the need to explore Earned Income Tax and would hope that the Tredyffrin’s supervisors would be likewise motivated — it’s called exploring options. Both the township and the school district have been faced with major deficits in their budgets that have required cuts in personnel, services, programming in an attempt to close the gap. But to what end can we continue to make these cuts? At what point do we weigh the quality of life that all enjoy in this community vs. increase in taxes? I do not see how continuing to say, no new taxes is a long-term solution to the problem. Comments?

A quick report from the Budget workshop. Only 25 or so residents tonight, probably reflecting that there was little discussion of program changes. The occasion was used mostly to lay out a framework, stake out some board member positions, and set up the important April 12 Finance Committee meeting where the next level of expense reductions will be discussed.

However there were some really significant outcomes, worthy of full attention.

The basic parameters being positioned to balance the budget are:
– Implement the $4 million of expense reductions already discussed
– Tax to the full 2.9% cap
– Use $2 million of fund balance
– Find at least $0.7 million of 2010/11 reductions from $1.5 million of mostly non-educational strategies
Round numbers, subject to tweaking up or down.

The principal dissent came from Dr Brake, who is not thrilled with the proposed changes to the Middle School program. He seems to be the only one on the other side of this.

Dan Waters and Kevin Mahoney lost few opportunities to highlight the fact that these 2010/11 actions leave the structural problem untouched (shades of Tredyffrin’s “structural deficit”!). And they are right: 50% of the $4 million is one year only, and of course the fund balance use can’t continue for ever. The deficit for 2011/12 after the above programs would still be $7.5 million (8.2 – 0.7).

So, the administration is going to do the following:
– Deepen the study of the $2.6 million of class size, CHS period changes, etc. that – practically – can not be implemented until 2011/12. (Strategies 47-56, approximately.) If all were implemented, the deficit would be down to $4.9 million.
– Study the implementation of an income tax. Taxing to a likely 2% Act 1 property tax cap next year would still leave the district $3 million short, so this – to me – seems inescapable.

Some EIT information that’s new to me, and definitely has a major impact on the revenues for TESD: Kevin Mahoney stated that there is the potential to reclaim not only taxes paid to neighboring municipalities, but also to Philadelphia (which would apparently get reimbursed from gaming revenues).

Kevin Grewell has posted a lot of helpful EIT information here. Important features confirmed tonight appear to be that this would be implemented under Act 511, which is coordinated with the Townships. Resident tax is split between School District and the townships, non-resident money is collected by the Township (which turns out to be looking at fire department funding).

Debbie Bookstaber (from the last TSC) asked that the study include a comparison of an EIT and a PIT.

The Board took pains to emphasize that program changes must be fully vetted, particularly in the Education Committee, and subject to public input. Back to that April 12th meeting. Also, decisions will need to be made soon on the health insurance funding and bond issuance as part of the $4 million 2010/11 programs – the former in particular being highly susceptible to assumptions. I’d like to be convinced that all aspects of utilization risk have been thought through

Further School Budget Discussion . . . How will the District fund the gap?

March 15, 2010

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Tonight is an important TESD Budget Workshop — 7:30 PM, auditorium at Conestoga High School. Yesterday, I posted the agenda and materials for review. This is our school district and our taxpayer dollars . . . how do you want your dollars spent and how do we fund the district deficit?

There have been many budget-related comments today on Community Matters — several of which were focused on EIT. For further discussion, below is a commentary received from Ray Clarke. In the past, Ray has offered his opinion on EIT but has updated his remarks based on TESD’s current 2010-11 budget information. Here are Ray’s comments — let’s use this as a starting point for discussion:

I’d like to get away from history (except as a guide to the future) and ponder what needs to be done to secure our kids’ education going forward. I think much of the evidence supports John’s advocacy of an EIT. I’ve posted it here before but here goes again, starting with updated budget numbers:

1. After one round of proposed program changes that have been vehemently opposed by many in the community, plus a 2.9% property tax increase, the school district will still be in the hole by $3 million in 2010/11, $8 million in 2011/12. (Note that it is relatively easy to squeeze expenses for just one year…..). No official word from Tredyffrin yet, but the township will need to fund contracted compensation increases next year, too.

2. A 1% EIT would raise $9 million for both Tredyffrin township and school district, of which $2.7 million is already paid by residents and $2 million would be paid by non-residents. (Easttown would also have to implement the tax.)

3. Perhaps a 2010 Tax Study Commission would ask a question like: “Would you prefer that property taxes increase 15% for all, or that the township residents not now paying a 1% EIT do so and the township gets a 1 for 1 match, worth $4.7 million a year now and increasing with inflation?” Might there be a different answer than to 2007’s question, which referenced only shifting taxes from property to income?

4. There will be in 2011 a county-wide mechanism to collect an EIT at low cost for all the other townships with this tax.

5. An EIT diversifies the tax base among all income earners and wealth holders.

6. The TSC stated that: “Had we been presented with compelling funding needs by the school board that could not be satisfied by the present system we may well have endorsed a change in the manner in which our schools are funded.”

So, given that …

– There is no willingness by the TEEA to consider deferring accelerating teacher salary increases (6.9% in 2009/10 over 2008/9, and more contracted each year until 2011/12) and sharing health benefit cost increases

– We need to fund $4 million a year in replacement capital and the capital fund is running dry

– There is no willingness to unlock capital tied up in unproductive properties (note: enrollment is projected to decline in the short and medium term)

– $2 million of the $4 million proposed expense savings have only a one time impact

…it seems to me that the need is indeed compelling. Whatever views one might have of past School Boards, it seems to me that the current one has to operate in a very different economic environment and that their actions should reflect that.

Monday, March 15 — 2010-11 School Budget Workshop

March 14, 2010

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Budget Development Workshop
Monday, March 15
7:30 PM
Auditorium, Conestoga High School

Budget strategies for the 2010-11 school district have been discussed at the February and March Finance Committee meetings. Those budget strategies are reflected in a draft budget which will be discussed in greater detail at the Budget Development Workshop tomorrow night. There will be slide presentation; click here for meeting’s agenda and a review of the slides. There is much information included on the slides and I would encourage everyone to review. One slide that caught my eye was the following:

Professional Staff (TEEA)
2009-2010
Teachers, Guidance, Media Specialists, Nurses

• Average years of service in T/E is 10.3 years (10.5 for 2008-09)
• 77% hold advanced degrees (74% for 2008-09)
• Average salary $74,581 ($69,788 for 2008-09)

How does the District intend to close the remaining gap in the 2010-11 budget? We know that there will be a $2.9% tax increase and the suggested budget cuts total approximately $4 million. There remains a $2.7 million gap . . . how will that deficit be funded? floating a bond? more programming cuts?

In the review of the Looking Ahead slide (pg. 26) we note that the 2011-12 school year budget indicates a deficit of $8.2 million (most of which is not attributed to PSERS increase). When the PSERS increase fully kicks-in for the 2012-13 school year, the deficit sky-rockets to $18.5 million! It continues to climb from that point — seriously, have a look at pg. 26, the numbers are staggering!

The draft budget includes budget strategies from the February and March Finance Committee meetings. These strategies include:

• Contribution from Food/Nutrition Service Fund to General Fund
• Education Service Center Disposition
• Outsource Print Shop
• Restructure 7th and 8th Grade Program Delivery
• Eliminate Elementary FLES Program
• Restructure Middle School Special Area Classes
• Reduce Number of Regular Education Aides/Paraprofessionals
• Eliminate all Conestoga High School Classes with Fewer than 15 Students
• Eliminate Supervisor of Special Education Position
• Reduce Number of Extra Duty Responsibility Positions and Club Sport Contribution
• Reduce 2010-2011 Budget Requests to 2008-2009 Levels
• Issue Debt for Capital Expenditures/Long Lived Assets
• Explore Self-Insurance for District Medical Coverage
• Hire an E-Rate Consultant
• Reduce Information Technology Budget by 10%
• Reduce Use of IT Contracted Services by 20%

Although I previously provided the budget strategy information, I think it is important to re-post that link for your review. These informational materials were used for the March 8 Finance Committee Meeting. The consensus reached by the School Board and Administration was to tentatively use budget strategies #1-12, 14, 31, 39 and 40 for a savings of approximately 4$ million. What budget strategies would you suggest to fund the remaining $2.7 million budget gap?

Tomorrow’s Budget Workshop represents one of the few remaining opportunities to let your voice be heard in regards to the 2010-11 budget. Whether you are a teacher, parent or taxpayer . . . do your homework by reviewing the materials and come to the meeting prepared. Offer your opinion to the Administration and School Board; speaking up could make a difference in programming and jobs for next year.

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Pattye Benson

Community Matters