A proposed increase of $463,789 in state money next year could be wiped out several times over by losses in property tax income and increases in pension and health insurance costs, the Wilkes-Barre School Board was told at the first of several budget meetings Wednesday.
That scenario would leave the district needing $1.7 million to balance next year’s budget.
The budget work is only beginning — and the board immediately started looking for places to cut spending — but Business Manager Leonard Przywara offered early numbers that didn’t look good. While Gov. Tom Corbett’s proposed budget would increase state allocations modestly, the district lost an estimated $229,706 in property tax through assessment appeals.
Pensions are expected to cost about $800,000 more than last year, and health insurance costs are estimated to increase by almost $1.2 million.
The board already has decided to keep any tax hike at or below a 2.4 percent increase — a limit set by the state that can be exceeded only by voter referendum or special exemptions granted by the state. But even if the board agreed to a full 2.4 percent increase, that would generate slightly more than $1 million, still leaving a shortfall of about $700,000.
The board could use money from a fund balance to cover that shortfall. In fact, there should be enough money in the balance — about $5 million at the start of this fiscal year — to avoid the tax hike entirely.
But the board already used $2.4 million of the fund balance last year to avoid a bigger tax hike, and the money is traditionally reserved for costly emergencies.
Przywara also noted that the district is negotiating four employee contracts — teachers, support staff, custodians and administrators — and that his figures did not include any potential pay increases if the contracts are settled.
Board members immediately started mulling cuts, including asking principals and department heads to find 10 percent “across-the-board cuts” in their budgets, similar to a move made last year with athletic directors. Board members also asked for a detailed budget from this year so they can look for more possible savings.
Several members questioned whether preschool programs held in three schools in partnership with Luzerne County Head Start would have to be eliminated to increase classroom space. The meeting began with Head Start Executive Director Lynn Biga showing test results that suggest the program is highly successful for low-income students at risk of academic failure.
Head Start serves 446 district preschool students through it’s programs, said Biga, most of them at the agency’s Beekman Street Center. Eliminating the classrooms made available in the three schools would mean 54 children would lose Head Start services, she said.
While the meeting was open to the public and attended by eight people — including several candidates for the board in the upcoming election — no one in the audience spoke when given the chance.