School district feeling budget squeeze
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.”