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Lancaster County School District Chief Financial Officer Tony Walker updated school board members on his expectations for the 2013-14 fiscal budget.
Walker gave board members the overview during the annual superintendent/board planning session Feb. 1 and 2.
Walker said he’s anticipating several tough factors affecting the school district in coming months from both sides of the ledger, revenue and expenditures, but its too early in the budgeting process to get overly concerned.
“Pretty much what it’s telling me is everything is constant, we’re not expecting any increase in revenue, which is not good, but it’s not as bad as it seems either,” Walker of an expected decrease in revenue. “We’re not going backwards, but we aren’t growing either.”
Among the concerns on the revenue side, Walker said, is the fact that the governor’s proposed budget for 2013-14 does includes a step increase, but no increase in minimum pay. Yet the district owes step increases from 2011 to qualified educators amounting to about $627,000.
Another concern is that the state Legislature may not raise last year’s per-student funding rate of $2,012.
Walker said the district is going to see a 3.25 percent increase in state revenue reimbursement amounting to about $351,000, which will be used to back out some of the $954,000 equity the district used for this year’s budget.
Finally, Walker said a change in the way the state pays the district will cost the district approximately $21,000.
When combined with an estimated 100 new students next year based on this year’s growth figures, that means the district is facing an overall decrease in revenue and equity of about $625,000.
“On the expenditure side, here’s where it’s going to hurt because we’ve got to pay that step increase,” Walkers said. “So we’re trying to give that last step and give one for the next year ... so those two things (step increases) alone are going to cost $1,725,000. And that’s not a raise.”
Other anticipated increases in expenditures, Walker said, include a 1 percent increase in employee retirement payments, amounting to approximately $500,000, and a 5 percent increase in health insurance amounting to about $150,000.
Utilities, cleaning contracts and the costs of supplies are also expected to increase, Walker said. Much of these costs are the result of new federal regulations of various sorts.
Walker said the school district also plans to increase the amount of money it sends directly to schools, work to reduce the student-to-teacher ratio and increase school security, all of which is good news for teachers, parents and students, but expenditures nonetheless.
“At this point, we’re looking at a deficit of about $3.3 million, but as always, that’s a worst case scenario,” Walker said.
Walkers said the district has several options to deal with such a deficit, from increasing millage to using equity. But the hope is that the Legislature will put more money into the state school budget to make up for the shortfall, he said.
The most uncertainty, Walker said, comes from the looming threat of sequestration in Washington, D.C., and it’s across-the-board spending cuts that could amount to as much as $500,000.
With the state Legislature’s budget process not even ramped up yet, and a historical tendency for the General Assembly to wait until the last minute to finalize budget plans, Walker said he’s not overly concerned at this point.
“It’s normal, what I’m used to seeing this time of year,” Walker said. “We always prepare for the worst and hope for the best.
“We usually get final numbers the third or fourth week in May,” he said. “We start talking about budgets this time of year, but there’s no use in getting worked up about it yet.”
Meanwhile, district Superintendent Dr. Gene Moore said he felt as if this year’s planning session was a success.
“Our board/superintendent planning meeting was very productive and positive,” Moore said. “It gave us the opportunity to provide our board in-depth information on topics we may consider throughout the year.
“It also gave us the chance to get very valuable input from board members on a range of issues,” he said.
Contact reporter Reece Murphy at (803) 283-1151