WILKES-BARRE — Stressing it’s very early in the process and that the numbers “are changing daily,” Wilkes-Barre Area School District business manger told the School Board on Thursday that the 2014-15 budget starts out nearly $3 million short.
Roughly $1.1 million of that is the result of the board opting to use that much from the district fund balance to cover a shortfall in this year’s budget. Assuming the same is done again for next year, the district would still be short $1.87 million as spending and income now stand, Przywara said.
That’s despite an increase of more than $1.2 million in state funding proposed by Gov. Tom Corbett. The problem, Przywara noted, is that Corbett’s proposal, which has yet to be acted on by the legislature, limits the extra money to new programs that boost academic achievement, rather than covering existing obligations.
Board Member Dino Galella said the district should try to find ways to use the money to offset current costs, possibly by using it to pay for a new reading program the district is adopting.
Przywara also cited a loss of $6.73 million in assessed property value from last year as some assessments were successfully appealed while other properties were purchased by non-profits. He pointed to two high-profile cases: King’s College buying the Ramada Hotel on Public Square in Wilkes-Barre, and Wilkes University buying the former Bartikowsky Jeweler building nearby on Main Street. All told, the decline in assessed value means a decline in real-estate property tax of $93,322.
Contracted salaries are estimated to increase by $1.1 million, and payments into the teacher pension fund, set by a state agency, will require another $1.1 million, Przywara said. An estimated 8.5 percent increase in health insurance premiums will raise those costs by $629,000, he added.
There was some good news. The district had heeded state advice and built up a reserve to offset soaring pension costs, and could use $1 million of that reserve this year, Przywara said. The insurance premium increase was estimated before the School Board negotiated a teacher contract that lowers health insurance costs by an estimated $1.1 million, and before new contracts were settled with support staff unions.
Przywara said he’s hoping that when everything is calculated insurance costs will remain about the same as this year. And the district has a fund balance of about $7 million.
Board members unofficially agreed to try to talk with officials at King’s, Wilkes and Luzerne County Community College, which has classrooms on Public Square, about possible payments to the district “in lieu of taxes.” Similar talks went nowhere several years ago, but Solicitor Ray Wendolowski noted King’s and Wilkes have new presidents and different financial situations.
The board must approve a final budget by June 30.