The Allentown School District Board of Directors will spend much of the next six months analyzing the 2013-2014 budget but the inescapable conclusion must be that there just isn’t enough to go around.
What else can be said when you propose raising taxes by 2.6 percent and are still $22.4 million in the hole?
Those are the ugly numbers presented by ASD CFO John Clark during Thursday night’s Finance Committee meeting in the proposed preliminary budget, which was approved out of committee. Perhaps in the understatement of the night, board member David Zimmerman categorized the dilemma this way.
“This is a hugely serious issue,” Zimmerman observed.
The $248.6 million budget presented Thursday night is a 6 percent increase from the 2012-2013 budget of $234.4 million. Like any budget fissure it’s rarely one issue and that rule holds true here as revenues are projected to decrease by more than $6 million from last year’s budget.
Most of that decrease – more than $5 million – is the result of decreased federal funding, according to Clark. While only 9 percent of the district’s overall revenue is acquired from the federal government, a potential 25.9 percent drop in funds from last year’s budget is no small matter.
The condition is worse on the expenditure side as salaries will shoot up more than $2.1 million from the previous year’s budget, retirement pensions for school employees, known better as PSERS, will increase by more than $5.3 million during the 2013-2014 budget.
Healthcare costs will increase by $2.2 million and the district will see major facility repair costs skyrocket by more than $3.3 million from the previous year’s budget.
“Nothing is off the table,” said Superintendent C. Russell Mayo. “And that includes furloughs...All the low hanging fruit has been picked for years.”
It should be stressed the budget presented Thursday night is laden with revenue projections and must be considered simply as a starting point for producing a final budget, due by June 27th. Gov. Corbett’s 2014 budget, which will be unveiled in February, will supply some answers although at this point a few things are known.
One is that revenue from Pennsylvania is projected to be below original expectations. And charter school costs will also increase, estimated Thursday night by about $873,000.
A preliminary budget must be approved by January 17 in order to comply with the Act 1 budget timeline presented by Clark on Thursday night.