Tredyffrin Easttown School District Archives - Page 34 of 42

Tredyffrin Easttown School District

On the eve of the Special T/E School Board meeting, there is much discussion on the $8.8 million deficit for the district’s 2011-12 school year and its challenge. Over the last couple of weeks, I do not recall much discussion about the possibility of adding an activities fee to the 2011-12 budget. If you recall, the T/E School Board passed the 2010-11 school year budget without the inclusion of an activity fee. The estimated $80K in activity fee revenue was removed before the passage of the final budget. The consensus at the time was there was not enough time to look at the details required for such an assessment. However, it was thought that some form of an activity fee should be discussed for inclusion in the 2011-12 budget.

Every year, students of all ages opt for extra-curricular activities. The activity may not be high-profile football or some other “major” high school sports. The involvement may be in the performing arts or any variety of positive clubs or organizations that contribute to making school kids better citizens. Depending on the activity, the kids and their parents may spend a lot of personal money on extra-curricular expenses (sports workout clothing, voice or instrumental music lessons, club-related materials, etc.). In addition, along with time spent on their studies, these students spend inordinate amounts of time practicing to become better performers or working for the good of the club. It’s also not uncommon for them to devote many hours of added time with fund-raisers to defray organizational expenses. Parents are not to be spared, either. Any parent of an “involved kid” at school will tell you about driving kids to and from practice, helping with fundraisers, etc. So how do we feel about imposing an activity fee on the T/E students and their families? Do you think that an activity fee will impact participation?

Checking other school districts, Lower Merion, Coatesville, Phoenixville, Owen J. Roberts and Kennett school districts currently have no additional activity fees. (I was not able to verify that Radnor School District imposes an activity fee – maybe a reader knows the answer.) Great Valley and West Chester school districts do not currently have an activity fee but are considering such a fee for the 2011-12 school year. The Downingtown school district charges their activity fee at a flat rate of $25 per sport.

Unionville-Chadds Ford School District currently has an activity fee but is considering an increase for next year’s budget. Their suggested approach is a creative four level-tiered schedule – $10, $25, $50 and $75 depending on the type of sports and student activity. The fees will cover many kinds of activities from math and academic clubs to participation on sports teams, like football and basketball. With the increase, the activity fees will generate an annual income of $133.00. The calculation of fees was based on total cost of the activity, an amount not to exceed 20% of the total cost. Using football fees as an example, the proposed increase is 200%, from a current $25 fee to $75; the increase would still be under the 20% of total cost.

If T/E adds an activities fee to the 2011-12 budget, how would the assessment be applied . . . per activity, per sports involvement? Would the charge be an annual assessment per student or per family? Will the assessment be a flat rate or a creative multi-tiered approach? Where does the T/E school board stand on the activity fee subject? I will be curious to see if the activity fee subject is discussed at tomorrow night’s special School Board meeting.

TESD Special 2011-12 Budget Meeting . . . How to Fund $8.8 Million Budget Gap

December 30, 2010

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Monday, January 3rd is an important Special T/E School Board Meeting. The meeting will be held at TEAO, Room #200, 940 W. Valley Road, Suite 1700, Wayne at 7:30 PM. For those unfamiliar, the building is located in a corporate complex just beyond the Southeastern Post Office. The meeting will focus on options to close the $8.8 Million budget gap in the 2011-2012 school budget.

In the last week, many of you have weighed in about the school budget deficit and the commentary has been very useful. However, there is no way to know if the School Board members follow Community Matters and have read our remarks. My guess is 2-3 of the board members regularly read the posts and comments but we cannot be sure of the others. That is why it is important to make sure that our voices are heard . . . you can attend Monday’s meeting and offer your remarks during the public comment section, or you can send the school board an email in advance of the meeting.

The email address for the T/E School Board – schoolboard@tesd.net

I received the following comment from Ray Clarke and thought it was important for the front page of Community Matters. Ray kindly shares the email that he sent to the School Board members below.

Ray Clarke, “I sent this to the School Board. I hope that other readers here will also make their views known directly.”
___________________________________
Dear School Board

I hope that you will take the following considerations into account as you vote for a preliminary budget on January 3rd, and conclude, as I do, that you should continue TESD’s sterling performance of increasing property taxes at a rate no more than the Act 1 index.

1. An increase in property taxes reduces the ability to finance house payments. Home price affordability in the past decade was stimulated by lower interest rates, despite the 50% increase in TESD property taxes. Now the bubble has burst, and short term prices are under yet more pressure from rises in mortgage rates and reduction in government subsidies. Prices remain above long term trend rates and many forecasts are for continued decline. The more the decline, the more homeowners will appeal assessments, the less revenue you will raise.

2. There is opportunity to focus spending further. The proposed preliminary budget has over 1/3 of expenses in “non-instructional” costs. The single best thing you can do to maintain the quality of the program is to attract the kind of residents that value education. High performing parents will be the source of high performing students. Smart parents do the calculus weighing test scores, college entrance results, key extra-curriculars (eg: sports, music) against cost. They’ll look for a School District that is as focused on performance and results as they are. (And of course the District Communications/PR program plays a role here).

3. The District can reduce the $28 million Fund Balance. As I recall from the Auditor presentation, that balance is substantially more as a percentage of expenditures than other districts. Although I expect you to do the work suggested by Mr Buraks to confirm the feasibility, I believe that more of this money can be returned to tax payers to pay for near term deficits while the cost structure is realigned through efficiencies and better employee contracts.

4. Holding the tax increase to the Act 1 level allows further analysis to determine the absolute floor in expenses and – if indeed a large tax increase is necessary – the most efficient and equitable option for raising revenues. I believe that you can not ignore the benefits of claiming an income tax that is already paid by a substantial portion of the district’s residents and for which the circumstances have changed dramatically over the past five years.

Many thanks for your your consideration of these items and for your time devoted to the interests of our School District.

Conestoga Students Not Supportive of Possible High School Programming Changes

December 23, 2010

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In today’s mail, we received an update from the T/E School Board – focused on the 2011-12 budget and the corresponding challenges facing the school district. The looming deficit facing the school district is a staggering $8.8 million. Reasons for the deficit include continuing decrease of revenue, salaries, increased teacher pension contributions and rising health care costs. These factors remain relatively unchanged from the 2010-11 school year.

The million-dollar question (or rather the nearly 9 million-dollar question) is how to solve the deficit problem. The school board will undoubtedly vote in favor of increasing property tax by 1.4% for the 2011-12 school year, which is the limit permitted by the Act I index set by the State. This move will provide the district with approximately $1.2 million in revenue . . . clearly, not close to the $8.8 million deficit. The district already has some cost cutting measures in place including the elimination of the FLES (foreign language in the elementary school program). There is also discussion of requesting an Act I exception that would provide an additional $2.4 million in revenue by increasing property taxes by an additional $2.8%. These suggestions will help decrease the deficit situation but do not eliminate the problem.

So what other cost-cutting measures can the school district take? Suggestions include (1) optimizing staffing – additional high school teachers will teach 6 periods instead of five; (2) restructure the high school program for 42 periods instead of the current 48 periods; (3) eliminate German and Latin in the middle school: and (4) continue to implement operational efficiencies.

There are some important T/E School Board meetings coming up in January. There is a special School Board meeting on January 3 at 7:30 PM to vote on using eligible Act 1 exceptions. If the Board votes to apply for exceptions, the School Board will present a preliminary budget on January 4 for public comment. The School Board will vote on the 2011-12 budget on January 24.

If you do not have children in the school district, it can be difficult to understand the impact of the cost-cutting suggestions. Conestoga High School students will be impacted if the school board members decide to restructure the high school program. I was curious if the students were surveyed (or asked) to offer their opinion on the proposed programming changes at the high school. By chance, I saw the following editorial in the recent edition of ‘The Spoke’, Conestoga’s newspaper. The opinion article speaks directly to student concerns in regards to possible programming changes.

No to proposed class cuts

Posted on 21 December 2010 by the Spoke Newsdesk
This article originally appeared on page 7 of the Dec. 21, 2010 issue of The Spoke.

The school district has proposed a plan that would cut down certain Conestoga elective courses from being six days a cycle to three days a cycle, a proposal that, The Spoke editorial believes, would have drastic repercussions in the future.

When asked what makes Conestoga unique when compared to other high schools, most students will not hesitate in answering that it is the wide variety of classes that the school offers. Elective courses offered here, ranging from AP Music Theory to Culinary Arts, allow the school to foster a sense of creativity and imagination that goes far in providing a well-rounded education.

Because of the ongoing budget crisis, however, the school district has proposed a plan that would, if passed on Jan. 3, jeopardize these elective courses. The district plans to remove some classes from the program of studies while cutting down the majority of them, including popular courses like Beginning TV and Ceramics 1, from being six days a cycle to three days a cycle. While this initially might not seem like a substantial decrease, it is sure to have repercussions in the future.

Though it is understandable that continuing some classes is economically unfeasible considering our current fiscal situation, the school should not cut down these important courses that offer students a way to creatively express themselves. Because many students at Conestoga take academically challenging courses, often filling up their schedules with Advanced Placement and Honors classes, they look at these classes as outlets that offer them both an entertaining and relaxing break. Such elective courses also allow students to branch out their interests so that they can focus on artistic or vocational skills, rather than center their high school careers on strictly academic disciplines. Most of the classes require students to gain a cumulative understanding of the topic, something that is difficult for the teacher to instill if classes only meet half of the cycle. Students are bound to forget important information and teachers will have to sacrifice valuable class minutes when classes resume next cycle. Therefore, students who eventually progress to the Advanced level classes might not be as proficient as others in past years and so the advanced matter will have to be diluted to compensate for information not taught in the limited amount of time.

By choosing to make these decisions about elective courses, the district will in essence stifle the uniqueness and creativity that thrives in our school community. In the past, students have left Conestoga knowing that they have had the opportunity in our high school to hone their artistic, technical and vocational skills.

Though The Spoke’s editorial board consists of mostly upperclassmen, we nevertheless lament the loss of the six-day elective courses, and are especially saddened by the fact that the underclassmen will not be able to capitalize on the many opportunities that we once took for granted.

We understand that Conestoga is among the elite in the country when it comes to offering students the luxury of elective courses and so we plead the district to reconsider their proposal. By limiting or eradicating some of these cherished courses, Conestoga risks its reputation as a place where creativity is fostered and originality is nurtured.

TESD Finance Committee Meeting . . . Raise School Taxes vs Eliminating School Buses or Support for Athletics? Notes from Ray Clarke

December 14, 2010

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In the midst of packing to leave for a family holiday, Ray Clarke was still able to attend last night’s School Board’s Finance Committee meeting. We are all grateful that Ray attends the meetings and then kindly supplies his notes. Thank you my friend and happy travel! Below are Ray’s notes and I think you find them interesting! With the looming deficit, we are not surprised at the direction of our school taxes . . . but tax increase vs. elimination of school buses or support for athletics? Don’t think those options are likely to be approved.

There was a well-attended meeting of the TESD Finance Committee on Monday night. There was much material to cover, though, and not much time for input from the 30 or so community members present. Since the size of the problem and contentiousness-level (sorry!) of some of the ideas is off the charts, all the Finance Committee could really do was kick the can down the road.

No surprise, the Committee voted to recommend that the full board vote on January 3rd to apply to the state for Exceptions to be able to increase property taxes by 2.8% on top of the Act 1 increase of 1.4% – total 4.2% increase. This would also involve publishing a preliminary budget at that time that shows a budget deficit (after the tax increases) of somewhere in the $4-5 million range (depending on whether any expense reductions are included).

Important to note: this recommendation keeps options open. On the revenue front, the Board could 1) still ask for a higher tax increase through a voter referendum (but could not now ask for an EIT), 2) ask voters to approve any tax increase beyond 1.4% (and not apply for Exceptions), 3) hold the increase to zero or 1.4%. On expenses, there seem to be $1-2 million of “Level 1” and other strategies that could reasonably be implemented for 2011/12. The gap between revenues and expenses that results from the final choices on the above dimensions would be met from the fund balance. Kevin Mahoney and Debbie Bookstaber seemed to be favoring revenue option (2).

A few numbers that caught my eye:

1. This year’s operating statement is being strongly fortified by delinquent tax collections and by reduced PSERS contributions that are each projected to be ~$750,000 favorable to budget, resulting (with other puts and takes) in a reduction of the expected contribution from the fund balance from $1.5 to $2 million.

2. The district is finally publishing and using figures that reflect TEEA increases closer to the effect of the actual salary matrix. The aggregate salary increase for 2011/12 is projected to be 7.33%, and may go higher with more movement across the matrix.

3. The projections use historical rates of increase for medical and prescription costs (10-15% per year); it seems possible that current experience will turn out to be more favorable.

4. The “base case” used for starting points includes the Act 1 tax increase of 1.4%. This is different from other years when the base case is the current tax rate. With no tax increase and no additional expense reductions, next year’s gap would be $8.8 million. This includes $470,000 add back of “one-time” strategies used last year.

5. Options to close the close the gap with no tax increase include things like: elimination of school buses ($2 million) and of support for athletics ($1.5 million), outsourcing custodial services ($0.95 million), further reducing aides ($0.8 million). There was no indication that the Board would seriously consider these, although there was commentary about transportation inefficiencies observed by some Board members. Interesting that the option to hold administration salaries flat (impact $150,000) was included with these “Level 2” strategies. There is also a set of strategies to eliminate teaching positions that if approved by the Education Committee/Board and if staff attrition occurs would eventually save $3 million/year ($525,000 of this will be up for approval at the 1/32011 Board meeting).

6. Going forward, the problem compounds – even with a model that includes no TEEA compensation increases (none!). The issues are flat assessed values, healthcare costs, and PSERS (no, Harrisburg didn’t fix it!). One audience member cited research that predicts that property values and employment don’t reset and resume growth until 2016. That ~$5 million in earned income taxes paid to other jurisdictions seems pretty important, as do healthcare benefit cost-sharing programs and index-linked compensation in future union contracts. Maybe we will continue to look to the state for PSERS help, but there is clearly a lot that can be done at the local level.

There was much talk of the educational value delivered by the T/E program. Dan Waters compared Lower Merion expenditures and Kevin Buraks asked for comparisons of tax rates of neighboring districts (but this blog knows we need to look at rate times assessed value too).

Finally, there was an interesting aside that the Great Valley School district has asked for support for a County-wide property reassessment. Not sure what that means, except at the least a correction of imbalances that have built up over the years.

Hopefully, there were other CM readers at the meeting who can amplify and raise things I’ve missed here.

News from Last night’s Board of Supervisors Meeting and T/E School Board Meeting

December 7, 2010

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If you were late arriving to Monday’s Board of Supervisors meeting than you were out of luck. Literally from the time the pledge of allegiance was finished, the supervisors meeting was over within 10 minutes. Bob Lamina read the announcements which included the Public Meeting on Wednesday, December 8 in regards to the Amtrak 252 bridge project, including an update on the Feasibility Study. Meeting to be held 7-9 PM at Delaware Valley Friends School. The other announcement was to remind residents that there is an expected vacancy on the Board of Supervisors due to Warren Kampf’s recent election to the state legislature. Those interested in filling the anticipated vacancy are asked to send a resume to Mimi Gleason by 12/31.

There was no new business from supervisors and no residents comments. It may have been the shortest meeting in township history.

News from the T/E School Board. The election of the school board president and vice president was on last night’s agenda. I am pleased to announce that Karen Cruikshank was elected president and Betsy Fadem, the out-going president, was elected vice-president. These positions are two-year terms. With the school district deficit, teacher contract negotiations and looming PSERS issues in Harrisburg, the challenges are there for our School Board. Best wishes and good luck to Karen and the other school board members as they struggle with our challenging economic times. Residents are fortunate to have such qualified school board members to guide the school district.

Tredyffrin Easttown School Board Meeting . . . Notes from Ray Clarke

November 23, 2010

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We are very fortunate to have Ray Clarke not only attending the Tredyffrin Easttown School Board meetings but so generously willing to share his notes and thoughts with all us. Last night was no exception — and below are Ray’s notes from the meeting.

I am curious about the IT upgrade proposal. The School Board accepted the proposal from Teranet Consulting Services for Phase I – Part 1 of the IT upgrade, not to exceed $11,625. According to the information on the TESD website, “The consulting services are to survey the network, develop a project plan and establish specs for support and services needed to implement the upgrades recommended by the administration.”

Last week the 4 page proposal from Teranet Consulting Services was part of the agenda package but after last night’s school board meeting the proposal letter is no longer available online. I wish the proposal letter from regarding Teranet was not removed, as I was trying to track down the company ‘Teranet’ and could not find it — only a company out of Chicago. No conspiracy theory on my part, . . . just trying to get further information on this consulting group. If someone from the School Board is reading Community Matters, perhaps they could provide a link to the proposal or a copy of the proposal to me at tredyffrincommunitymatters@gmail.com . Thank you.

Here are some items that caught my eye and ear in Monday’s School Board meeting.

1. The administration reported on proposed changes to the high school schedule and staffing, to implement a 42 period cap for students and to increase teaching classes for teachers.

The cap would be subject to a few exceptions; for example, for co-curricular classes like orchestra and chorus that also meet outside the school day, and for academic support. Much discussion by the Board of whether studio art classes should also be exempt, although these seem to be just like music classes which would be in the cap. Reportedly the cap is highly favored by students. The middle school “advisory period” has proved really popular.

Eliminating the “professional period” for teachers would bring the number of teaching periods for T/E in line with neighboring districts, at the expense of activities that teachers elect to undertake, like “office hours”, club oversight, mentoring, etc.

Note that both these changes will in the long run bring financial benefit to the district, but only after the staff has reduced through attrition.

2. The high school musical will be Phantom of the Opera, for which the rights have just been released to schools. If this comes close to matching the stunning Les Miserables production of five or so years ago, tickets will be hard to come by. Big vocal and technical demands, though, especially for the radio-controlled boat….

3. Under Education, there was discussion of increasing the Highway Safety class size to 60 – maybe not so bad – and teaching AP World History in 9th Grade – a big stretch, it seems to me. Also the changes in World Languages look to be enabling deeper immersion in core languages like Spanish and French. A good development.

4. Under Facilities, the Board was presented with, and approved, only the first part of the consultant proposal for work on the data network upgrade. To me, this constraint is a step in the right direction. It would be nice to see an IT project that is actually driven by user/education requirements and a real business case rather than by the technical/facilities people! We should watch future Facilities Committee meetings closely for the justification of the likely multi-million dollar expenditure.

5. And the Committee to be watched most closely, of course, is the Finance Committee. Kevin Mahoney previewed the December 13th meeting, which will set the stage for the Board’s big tax decision on January 3rd. That next meeting will unveil near term projections including:

Updated PSERS costs from Harrisburg’s parting “gift” of HB2497, (a slight reduction over the expected increase for 2011/12 and much bigger benefit for the following few years, as discussed here previously)

New estimates for key budget variables (eg interest rates, price increases, compensation increases)

Presumably some guess at the attrition-enabled impact of the Education programs

Any other budget strategies

An important date for anyone concerned with tax increases.

TESD Facilities Committee Meeting – Presentation of $3 Million Plan to Upgrade IT Network

November 12, 2010

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Ray Clarke attended the school district’s Facilities Committee meeting and graciously sent me notes. Although I have been married to a computer marketing guru for 30 years, I certainly don’t claim to have any understanding of the IT world. However, it is almost certain that when organizations make significant IT changes/upgrades — they are nearly out of date by the time they are installed. Because computer technology is constantly changing and advancing in today’s world, it can be difficult (and costly) to stay current. Technology experts — we could use your thoughts on the school district’s IT network upgrade plans.

Ray Clarke’s TESD Facilities Committee Meeting Notes . . .

Friday’s TESD Facilities Committee meeting was most notable for a presentation of a $3 million plan to upgrade the IT network. Happily, the Committee gave approval for only initial consultant planning work. Hopefully more of the community can be present for that report to learn what exactly is to be done, when, and what the practical user benefits will be.

The basic argument went as follows: “Text books and teaching materials are becoming more available electronically. Therefore we need a) higher speeds in the district network, and b) wireless network availability throughout the high school (already in place?), the middle schools and eventually the elementary schools.” The consultant waved his iPad, and stated it was useless without a network. But, is the converse also true?

Are we therefore setting the District up for an ongoing cascade of expenditure? The Committee was adamantly against the provision of mobile devices to students. Will they therefore be able to bring their own? Will our classrooms come to resemble the Ivy League class my wife and I sat in on, where 90% of the students were on Facebook, playing video games, IM’ing their buddies a few rows down, etc.?

The $3 million will expand the network speed from 1 to 10 gigabtyes per second. That’s nice. Is the network slow now? What’s the current capacity? What’s the correlation between capacity and response time perceived by the user? How much capacity does a “multi-media-rich, interactive web-based” class need? How many such classes could the current network support? What would happen if every class had one of those presentations at the same time? (And if they did, what would that say about our ability to have our students actually engage in stimulating discussion with the teacher and their peers, and actually learn to THINK?)

We’ll know the temperature and humidity in the switch closets. Also nice to know, but are we having sauna/steam room problems now? Further, it would be nice to have every phone in the school have immediate emergency power before the generators kick in, but what problems are created by the current situation?

I trust that there are answers to these and other questions. Dr Motel and the Committee were absolutely right in not giving carte blanche to this proposal and in asking for a real plan. Perhaps the bottom line question should be: How will our students benefit?

The 10 year capital plan – without solutions for district storage and maintenance facilities and with no provision for ongoing IT needs – shows the $15 million from last year’s bond being used up during 2014/15. The next tranche of bond funds at the same interest rate would be available just in time (I think (?)). Otherwise that $9 million designated for capital in the General Fund (if indeed it’s still there) would be needed.

Not much leeway, it seems to me.

Tredyffrin’s 2011 Budget Unveiled – No Tax Increase! TESD Finance Comittee News Not as Positive

November 9, 2010

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Due to last night’s Board of Supervisors meeting change (due to Election Day), I was unable to attend. However, I have received an update about the township’s proposed 2011 budget. (Here is a link to the proposed 2011 budget). It is my understanding that the proposed budget includes (1) no increase in taxes; (2) no reduction in township services or personnel; and (3) restoring of fire company contributions to 2009 levels. Considering that Lower Merion’s residents are facing a 12.7% tax increase in their 2011 budget, last night’s news is particularly good for Tredyffrin residents!

Having not see the proposed budget and having not attended last night’s supervisors meeting, I do have a question for anyone who did attend — how was the township building’s HVAC capital expense factored in to the 2011 budget? If you recall, there has been much discussion about valve and duct work replacement in the HVAC system and the associated costs. Does anyone have information how the needed HVAC work was treated in the proposed 2011 budget?

Although last night’s supervisors meeting was over by 8:15 PM, it seems that there was more discussion at TESD’s Finance Committee meeting. I counted on my friend, Ray Clarke to provide notes from the meeting and as usual, his detailed notes did not let me down. Thank you Ray!

TESD Finance Committee Notes from Ray Clarke —

Monday’s TESD Finance Committee meeting was largely devoting to laying the groundwork for property tax increases.

This year’s revenues and expenses are largely in balance, with the shortfall in transfer taxes offset by Harrisburg’s deferral of PSERS costs and many smaller ups (eg salaries) and downs (eg FTEs). The projection for next year remains for the moment at a $6.9 million deficit, but a detailed review of the assumptions in the model revealed another $1 million of overly optimistic assumptions: a 1% increase in assessed value and a 2% return on investments. (The $1 million over-generous (in today’s times) transfer tax formula was not discussed). The model will be re-worked with new assumptions (a 0.26% assessment decline and a 1% investment return, not done at the meeting), but it seems clear to me that the deficit is going to be north of $8 million, as discussed here last month.

Leftover 2010/11 budget strategies likely to be implemented in 2011/12 could be worth a benefit of $0.8 million, although they would have to be phased in only as attrition allows.

The Board then reviewed the timetable for the processes required to a) define and request available exceptions to the increase property taxes beyond the Act 1 limit ($1.2 million) and b) prepare a referendum question for a property tax increase beyond the probable [Act 1 + Exception] limit ($2.8 million).

What this means is that the proposed preliminary budget must be discussed at the next Finance Committee meeting on December 13th if the School Board is to vote on requesting exceptions at its January 24th meeting.

If there is any intent to raise taxes above the Act 1 limit, the 2011/12 budget must be adopted by mid-February.

So, the pressure is on in the next couple of months. If the Board voted against even considering whether to ask the community to implement an EIT that 40% are already paying, can they really ask for a referendum to increase property taxes by a greater amount? The alternative is likely to be raiding the General Fund for the $5 million shortfall (bringing it down to $23 million), and thus pushing off the problem until 2012/13, . Likely still OK for the bond rating.

In that year, of course, the PSERS problem will hit hard under the current formula – a $5 – 6 million net cost increase. Plus of course another 4.5% TENIG increase and a new TEEA contract. A deficit, after more property tax increases, of $10 million, say. That would take the fiund balance into tricky territory. There was much discussion of the need for a state fix to PSERS and the spectre of School District bankruptcies (not TESD!) was raised.

Maybe it will actually take defaults and bond-holder restructuring to force the kind of constitutional changes needed to reform current pension plans. Dealing with the problem by squeezing new hires may solve long run accounting, but will there be enough cash to get through the short term, and if we do, how will we be able to attract a next generation of teachers of the needed caliber?

There’s probably more to comment on, but I’ll stop with the interesting sidebar that the average wage cost of a teacher used in calculation of budget strategy savings was raised from $73,000 to $80,000 – a 9.6% increase. This recognizes the actual individual year-on-year salary increase built in to the current contract and hidden in the 5% numbers much publicized officially.

Tredyffrin-Easttown School Board’s Finance Committee Meeting – Tonight – As Tredyffrin’s Board of Supervisors Unveil their Proposed 2011 Budget

November 8, 2010

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The T/E School Board’s Finance Committee Meeting is tonight, Monday, Nov. 8, at 7:30 PM. The next school-board meeting is scheduled for Monday, Nov. 22, at 7:30 PM. Meetings are held at the school district’s administration offices, Room 200, West Valley Business Center, 940 W. Valley Road, Suite 1700, Wayne. Here is the Finance Committee agenda.

A visit to the school district’s website offers Earned Income Tax information, updated on October 26 after the T/E School Board decided not to move forward with the EIT referendum at their October 25 school board meeting.

As a follow-up to the last T/E school board meeting, here is an article that appeared in yesterday’s Main Line Media paper. The school board’s Finance Committee meeting occurs tonight as the township’s Board of Supervisors unveil their proposed 2011 budget. Could be an interesting night on both accounts!

T/E School Board shelves EIT; 2011-12 budget gap remains
By Alan Thomas

Hang on. There may be a collision.

The Tredyffrin/Easttown School Board decided not to push an earned income tax of 1 percent for Tredyffrin and Easttown residents for 2011-12 during its Oct. 25 meeting while, at the same time, its Web site notes that the district is facing a “projected budget gap for the 2011-12 school year of $6.9 million.”

The tax proposal would have been subject to approval in a May 2011 primary-election-ballot referendum. And so the EIT proposal was apparently advanced as the preferred way of avoiding hitting the budget gap head-on. Or so it might have seemed.

At a community informational meeting held at Conestoga High School Oct. 18, around 100 residents heard presentations from Pennsylvania Economy League representative Steve Wray and school-district solicitor Kenneth Roos laying out both advantages and disadvantages to the levy. A week later the board decided not to move forward with the EIT while also moving to “further study” the topic in 2011.

Board secretary and business manager Arthur J. McDonnell said that “the process [of looking at the possibility of an EIT] was started about a year ago. We came up with a series of strategies [to overcome the projected budget gap].” With the present proposal now tabled, McDonnell said that the board would “begin studying it [again] in early spring.” McDonnell did not comment on reasons why the board had made an apparent U-turn.

According to a Web-obtained document attributed to “Inquirer research on county ballot documents,” 63 school districts in Bucks, Chester, Delaware and Montgomery counties have or are proposing either EITs or PITs. Personal income taxes (PITs) include dividends, interest, income from trusts, bonds, insurance and stocks as taxable whereas EITs do not.

According to Berkheimer Tax Administrator and posted on the school district’s FAQ Web page, “one-third of the T/E residents currently employed are paying an EIT [to another school district, totaling $3.58 million].”

The projected budget gap will be there.

Ray Clarke Pens Letter to the Editor in Favor of a TESD Earned Income Tax Consideration

October 20, 2010

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Ray Clarke attended the T/E School District’s Earned Income Tax presentation this week and wrote the following Letter to the Editor. On Monday, October 25 the School Board will decide whether to move forward with a May referendum on the EIT. As Ray explains, the school district will not be able to move forward with an EIT unless it receives the vote of the residents. I hope that the School Board members will vote on Monday to continue the process . . . it’s important that residents have the opportunity to participate with their vote in May.

Pro-TESD EIT

To the Editor:

Next Monday, Oct. 25, the Tredyffrin/Easttown School Board will take a vote that is critical to the financial prospects of the district and its residents: should it go forward with consideration of an Earned Income Tax (EIT) as one tool to fill the looming budget gap? Last night (Oct. 18) the board held an excellent, well-attended information session explaining the tax and its implementation, and I encourage all residents to watch the broadcast (times on the TESD Web site, www.tesd.k12.pa.us) and then make their views known to the board.

School-district expenses are continuing their inexorable rise, fueled by compensation costs: contracted salary increases, health-care costs and pension costs. The official projection for 2011-12 is for a $7-million gap with extremely favorable assumptions for investment income and transfer taxes risking another $2 million. Last year T/E cut some $6 million in expenses, drew down its Fund Balance reserves and contained its property-tax increase to the Act 1 limit of 2.9 percent. This year the options are more limited. Salaries can only be reduced through attrition, even if programs are cut. Supplies expenses are already back to 2008-9 levels. Real-estate assessments are being appealed at record rates. The state cap on property-tax increases is worth only $1.2 million.

An EIT would be one way to limit the pain for taxpayers, 40 percent of whom already pay such a tax to the municipality in which they work. This money (perhaps as much as $6 million) would come back to benefit the district. The tax is low-cost to collect, diversifies the tax base away from dependence on the property market and would not, by definition, impact those who have lost their jobs. Ninety-five percent of jurisdictions in the state have an EIT: those that do not are mostly clustered around Philadelphia. This is a legacy of the days when taxes paid in the city would not benefit the taxing locality; now there is the potential for gaming revenues to fill that gap and directly offset property taxes if there is a local EIT.

The school district cannot implement an EIT without approval from residents voting in the primary next May. The process to put the question on the ballot requires a – non-binding – notice to the townships of the intent to put the question on the ballot. This is the reason for next week’s board vote.

Many unknowns remain. In particular, would the townships jump on the coattails and claim the 50/50 split of the revenue to which they are entitled? How much can expenses be cut? What is the best-case budget gap? How large would the property-tax increase have to be absent an EIT, and would that increase have to be put to voter referendum? What would the EIT rate be and how much money would it raise? What would be the likely property-tax offset, if any?

It’s important that the school board vote to continue to explore these questions, and allow the voters to make their voice heard next May.

Raymond F. Clarke, Malvern

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