5-year projection for schools: Dire straits if Issue 48 fails
By: Health Insurance
Submitted: 2009-10-05 13:44:01 | Word Count: 892
With the introduction of the new five-year financial forecast Monday, Sept. 28, Westerville schools Treasurer Scott Gooding shared both good news and bad news.
The good news: Tax collections are up from this time last year.
[ advertisement ]
"Not only are people paying on time, we're seeing delinquent collections up," Gooding said. "We take that as a very good sign. ... Things are moving in the right direction."
The bad news: Gooding still is projecting that, unless the district's proposed operating levy passes in November, the district will have just $6,150 left at the end of the 2009-2010 school year.Without income from the new 7.97-mills generated by Issue 48, projections for Fiscal Year 2011 show Westerville schools almost $19 million in the red.
Issue 48, an 11.4-mill replacement operating levy, would replace two levies originally passed in the 1970s that are currently being collected at a rate of 3.43 mills. It would generate about $19.6 million per year annually -- enough to balance the district's budget through the end of Fiscal Year 2011.
The net increase between the new rate if Issue 48 passes and what residents pay on those old taxes now is 7.97 mills -- or $244 per year of increased property taxes for homeowners, per $100,000 of home value.
The new five-year forecast shows deficits growing to almost $46 million in Fiscal Year 2012, $83 million in 2013 and $110 million in 2014.
Because the state Department of Education requires districts to maintain balanced budgets, either cuts must be made or new revenue must be generated.
The projected deficit for Fiscal Year 2011 has increased by about $5 million since Gooding last altered the forecast earlier this year.
Gooding said the additional $4 million accounts for inflationary growth for utility and supply costs, food, and other consumables.
"Bare bones, we would have to have $14 million to get a zero-balanced budget in 2011," Gooding said.
To even maintain a slight positive balance through the end of this school year, the district is relying on federal stimulus funds for some teacher salaries.
About 81 percent of Westerville's $137 million general fund budget goes toward personnel expenses. Gooding said that number is on par with -- or less than -- other school districts in Central Ohio.
Last month, the Westerville Education Association agreed to a contract that freezes teachers' base salaries for one year.
About 54 percent of district teachers will still be eligible for step raises this year based on teaching experience. Those step raises will cost the district $1.3 million in 2009-10, Gooding said.
A teacher with a bachelor's degree has a salary increase of 4.2 percent with each step level attained, according to the district salary schedule.
Projected increases to staff benefits of $1.4 million for 2010 include insurance premiums, which are also projected to increase 15 percent each year from 2011 through 2014.
Insurance tabled; answers sought
In related business Monday, the board tabled a resolution to approve medical insurance rates for 2010. The rates proposed by Medical Mutual of Ohio are an increase of 10.5 percent over current premium rate levels.
Board President Kevin Hoffman moved to table the resolution to better understand the reasons for the increase before proceeding. The proposed rates are $505 for single coverage and $1,320 for a family.
Westerville resident Peg Duffy spoke at the end of the meeting, highlighting the public's concerns about continued teacher step raises and employee benefits during a year when many voters will have lost jobs or experienced salary freezes or cuts.
"The levy vote may hinge on whether voters feel they can afford to give raises to those we employ when our own earnings are at best flat or reduced by furloughs, not to mention unemployment," Duffy said.
"The recently negotiated agreement says that in (fiscal year) 2010 no contract shall be suspended based on financial reasons. The average working person would be delighted to have that kind of job security."
She also mentioned that retirees on Medicare pay $96.40 per month per individual, nearly $1,157 annually for Part B, which does not include prescriptions and wondered aloud how that amount compared with what district employees contribute to their own healthcare costs.
Hoffman said that the district agreed in 2006 when it switched to a high deductible health plan to pay for 50 percent of $2,400 per family or $1,200 per single.
The board will hear a second reading and public hearing on the five year forecast at its next meeting, which is scheduled for 7:30 p.m. Oct. 12, at Alcott Elementary, 7117 Mount Royal Ave.
A five-year forecast must be approved by the end of October.
Author Resource:-
Quoting and Saving on your health insurance has never been easier...EasyToInsureME
EasyToInsureME offers clients the easiest way to buy individual health insurance. Free services include instant online health insurance quotes, custom proposals for each client, free phone consultations, and 10-minute application by phone. Nobody does what we do for our clients!
