Archive for Thursday, January 15, 2009

School district feeling budget squeeze

January 15, 2009

Budget crunches and cuts at the state level are beginning to trickle down to the school district level.

Some tough times will be ahead for the Baldwin School District. That realization happened Monday night at the Baldwin School Board meeting with even more news coming Tuesday afternoon.

The most recent announcement came to Supt. Paul Dorathy Tuesday. He received information about Gov. Kathleen Sebelius’ budget plan that would cut school funding. Sebelius’ proposal represents a “hold steady” plan after several years of significant increases.

“Her recommendation would cut $37,594 from our budget this year,” Dorathy said. “Then we would lose $113,322 from next year’s budget. That’s what she is proposing, but the Legislature still has to meet and discuss what they want to do. I imagine they’ll have a decision about this year’s budget rather quickly.”

Since Sebelius’ plan was announced Tuesday, the school board didn’t discuss any solutions to possible cuts on Monday. However, board members did talk about other cuts in driver’s education and the district’s current health insurance problems.

The driver’s education funding issue is a result of state funding cuts. According to Dorathy, the state transferred $1.7 million out of driver’s education fund and into its general fund. That caused a reduction in the district’s funding per student. It decreased from $108 to $38.

“Well, we’re $70 short for every student who took driver’s education last year,” Dorathy said. “This year, the prediction is, and what we’re being advised is, that they may not have any dollars. The problem is, to fully support the program, it may require an increase from $160 to almost $300 to take driver’s education. I think the board wants some time before it makes that decision.

“Most people need to understand there will be a significant increase in the cost for taking driver’s education this summer,” he said. “I just don’t know how much it’s going to be. It’s being caused because we are losing all of our state aid for driver’s education.”

During Monday’s meeting, the school board briefly discussed the effect of increasing the cost of the program. Board members were concerned about a large increase in the price, but they realized Baldwin might not be the only district in this situation.

“If the state cuts everybody’s funding, we won’t be the only ones with a skyrocketing price,” Board President Alison Bauer said.

Another topic of discussion came about from a question of Board Member Blaine Cone. She asked if the district charges $300 per student but the state finds a way to fund part of the program, could the district reimburse the students the amount the state funded.

Cynde Frick, director of financial operations, told Cone the district could give the money back to the students in that situation. Another solution to the funding cut could come from the district’s $4,700 carryover in the driver’s education fund.

“I think the board may be considering using that carryover to offset this,” Dorathy said. “But that will be a one year thing. Then the following year, we’ll be back at square one with the funding for the program.

“The problem with eliminating that reserve completely is, one, you have to fully fund the program the next year, or you may have a program that’s going to go into the hole,” he said. “To run a fund into the hole is not legal by statute. So we’ll have to supplement that with other money, but we don’t have other places to pull that money from.”

The final piece of the budget puzzle from Monday was about the district’s health insurance. On Tuesday, Dorathy explained the problem. He said the district doesn’t have enough people on its plan and the ones who are on it have health problems. That is causing the claims to be higher than the premiums.

So, the district had a 30 percent increase in premiums and could face a 40 percent jump this year. Another possibility is that United Health Care may drop the district completely, according to Dorathy.

“Health insurance is going to be a challenge,” Dorathy said. “This district, over a number of years, has gotten to a point where health insurance has become a critical problem. At this point, all I can say is that it will take several hundred thousand dollars. I don’t know until our insurance broker goes out and markets us to several companies to see where we are at and how much that figure will be to repair our health insurance plan.”

The district budgeted around $400,000 this year for health insurance. Dorathy said the district would have to increase that by several hundred thousand dollars before its Sept. 1 renewal date comes.

“Last year, we put between $150,000 and $200,000 more into what we were doing for health insurance for employees,” Dorathy said. “So we made a pretty good jump last year. It’s just this year is probably going to require an even more significant increase.”

The decision on health care and its cost to the district will have to be discussed in negotiations with the teacher’s union. Dorathy said it has been discussed and will continue to be talked about.

“It’s a real challenge and it’s going to require reallocating quite a bit of money to health insurance,” Dorathy said. “It comes down to making a decision whether we have health insurance or we don’t have health insurance for our employees. That’s the choice we have to make right now.”

Comments

Cityboy 5 years, 3 months ago

Okay sometimes you have to laugh or you might just cry ...

Does anyone see any irony with the above article and the "Ads by Google" that state "Cheap Health Insurance ... Single just $99, Family only $249. Aprroval guaranteed. Call today."

Everyone needs health insurance, especially if you want to keep and attract good employees. There has to be a solution!

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beevo 5 years, 3 months ago

Why $300.00? In 2009, it looks like Kansas school districts will have their Kansas State Drivers Education Program Funds decreased to $38.00 a student. It is stated in the article “School District Feeling Budget Squeeze” that a reduction in the Baldwin’s funding for Drivers Education has decreased from $108 to $38.00 per student. Lawrence Dist. USD 197 said it received $88.00 per student in 2008-2009. Why did Baldwin City Dist. USD 348 have a higher reimbursement than Lawrence? Is this figure inflated to make the cut in funding seem larger? I have recently read that two school districts in our area have increased the cost of their Drivers Education programs to $200.00. Louisburg, USD 416 Board of Education’s has increased its driver’s education fees from $160 to $200. Lawrence, USD 297 has raised the cost from $120.00 to $200.00. Why will the Baldwin school district need $300.00? Driver’s education is a very important program. All students should have access to driver training. Some parents will not be able to afford it at even $200.00. Because of the cost will more teenagers will be driving illegally or without the proper educational training? Our young people need driver’s education! It is a matter of life or death!

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bc 5 years, 3 months ago

bevoo, you missed the fact that Lawrence also has a 10k contingency fund and they originally voted down raising costs to $250. They also will drop drivers ed without a minimum enrollment in the program. So it's not as cut and dry as you make it seem.

At $300 per kid in Baldwin, the program breaks even with $0 state funding. The state reduced the funding to $38 per kid for LAST years drivers ed, which in turn, shorted USD 348 and everyone else funds they had expected to receive. The state is telling districts to expect to receive $0.00 from the state for this year's drivers ed program.

The districts who are at $200 are most likely supplementing drivers ed out of their other funds, so they have a net-loss on the program. Also, keep in mind that vehicles, staff and mileage costs are all factors that vary between USD 348 and other districts so your comparison is hardly valid unless you actually do the research on what the programs actually cost each district.

It's not a matter of Baldwin or any other district shorting the kids an opportunity. We need to be barking at our representatives in Topeka who are cutting the funding if you think this should be funded by the taxpayers in general.

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Torch 5 years, 3 months ago

The 800 pound gorilla in the living room is the 'promised' portion of the $23 million bond recently passed.

One has to believe if the State is cutting to the bone whether the money Amy and the other snake-oil salesmen promised us is coming. I'm guessing not but haven't heard a word about that....odd eh?

Suckers.

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beevo 5 years, 3 months ago

Contrary to what some of you may think drivers education is very important to all of us.That is why the state has funded it for so many years. Bottom line is the students & their parents will be put in a bad position if the costs go up to much. Let's keep it affordable.

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beevo 5 years, 3 months ago

BC, Lawrence may have $10,000 in their contingency fund. However, it was stated that Baldwin has a $4,700 carryover in its driver’s education fund. That is almost 50% of the Lawrence total. I am sure Lawrence 497 will have many more drivers educ. students than Baldwin. The $10,000.00 in USD 497's Contingency fund would appear to be a smaller percentage per student than Baldwin's $4,700.00. I understand why Baldwin can't spend it all. I agree that we need to contact our state representatives. But the bottom line is, that drivers education still needs to be affordable.

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NanCrisp 5 years, 3 months ago

bc said, "Also, keep in mind that vehicles, staff and mileage costs are all factors that vary between USD 348 and other districts."

How very true. Could it be that other districts are more cost-efficient with their purchases of vehicles, their staffing and their mileage costs?

Driver Education is absolutely the very best place to start with implementing a policy of "pay what you can." I strongly advocate that we need to stop subsidizing the educations of people who can well afford to pay their own way. Let's start with this program and have those who cannot afford it pay nothing, with a sliding scale all the way up to $300 for those who are flush with cash. I suppose there must still be quite a few of those folks in B.C., as so many people seem eager to spend-spend-spend like there is no recession.

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bc 5 years, 3 months ago

NanCrisp, basically I was speculating that a district like lawrence may be able to purchase fuel at a lower rate due to the volume they use. I don't see anything wrong with a decision to increase the costs. If they don't it comes out of other programs which are looking at cuts from the state too.

While it may not be convenient, if parents want to save some money, then they can run theirs kids through drivers ed in Lawrence or wherever it is cheaper.

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Torch 5 years, 3 months ago

I'm curious what the patrons of Baldwin think about the fact that the District has already drawn $11 million in the bond money but had no where to put it...so they spread it amongst the banks in Baldwin where they can't get more than half a percent interest while they're paying 5 percent now that the money has been withdrawn.

Comes to about $500,000 in interest a year that the District has to pay...and guess what - that has to come right out of the $11 million already drawn.

Oh wait...the patrons don't know about that do they?

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beevo 5 years, 3 months ago

Death Spiral - Higher School Taxes? From what Supt. Paul Dorathy has said it looks as if the Baldwin School District is in a Health Insurance Death Spiral. In this case it is to a small group health insurance policy. A death Spiral is an insurance term that describes an insurance policy whose premiums are significantly increasing as a result of adverse changes among the insured population. One of the common causes is when the people insured have substantial number of claims or very large monetary claims are paid. Because of the extra monetary risk the insurance company needs more money to cover the expected excess losses. Premiums are increased. To avoid the dramatic increase in premiums the lower risk insureds often choose to cancel or not renew this insurance policy. This leads to a further increase in the premiums of the insurance policy. Supt. Dorathy is right, this is a critical problem. Five hundred thousand dollars or more is a very large amount of money! Health insurance is important. The school board needs some very good counsel. Then they need to make some difficult decisions. If this can not be resolved properly our personal property taxes will take another big hit. Lets hope the board can solve this dilemma.

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