CB School Board Hears Impact of State Budget

The numbers are stunning. The implications are enormous. 

After digesting Gov. Tom Corbett’s proposed budget for public education, the is looking at these ugly numbers for 2011-2012: 

• The loss of more than $5.4 million in state funding; 
• A $4.5 million reduction in local real estate tax revenue as a result of property reassessments; 
• A 1.34 percent property tax increase; and
• The use of $5.6 million in fund balance.

 And still the budget is $1.05 million in the hole.

Superintendent Dr. N. Robert Laws said he would unveil the human cost of such a devastating budget at the next school board meeting in April.

“When you don’t have the resources, you have to re-invent the way you do things,” he said at Tuesday’s school board meeting. “About the only way to make a dent is to shed programs and to shed people." 

CB’s budget predicament is the culmination of a perfect storm that began to form in 2007 with the start of the recession. As local revenues dropped – earned income tax, investment income, interim real estate taxes – state subsidies helped prop up the district’s finances. 

But with the loss of federal stimulus money from the last two years, along with Corbett’s plan to restore public education funding to 2008-09 levels to rein in state spendng, the district finds itself in dire financial straits.

“We can’t cut expenses fast enough to keep up with the loss of revenue,” said business manager Dave Matyas.

Most of the blame goes to the state. In 1975, Matyas said, federal and state revenue made up about 30 percent of the district’s budget. In 2011-2012, those two sources will account for only about 16.2 percent, or the equivalent of 23.8 mills, he said. 

If state support had remained constant through the years, Matyas estimated a property assessed at the district average of $40,000 would be paying about $952 less in real estate taxes in 2011-2012.

 Under Corbett’s proposed education budget, CB would lose $1.8 million in FICA (Social Security) reimbursement, $1.2 million in federal stimulus funds, $1.1 million in its Basic Education Subsidy, an $842,000 Accountability Grant, and $150,000 in its transportation subsidy.

Matyas said some of the reduced revenues are the result of the state linking some funding formulas to the district’s aid ratio. Because it is perceived as one of the wealthier districts in the state, its funding levels are reduced, he said.

Right now, the district’s $279.4 million spending plan for 2011-2012 calls for a 1.34-percent real estate tax hike, which would cost the owner of a property assessed at the district average another $64 a year. If approved, it would be the smallest tax increase for Central Bucks property owners in 20 years, said Matyas.

The district will continue to cut expenses while looking at new ways to generate revenue, said Matyas. The hard part is doing that while maintaining quality education programs, he said.

One piece of good news: refinancing $170.7 million in debt will save the district $1.5 million a year for the next 18 years, about 50 percent more than expected.

 “We hit the market at the right time,” Matyas told the board.

For the second meeting in a row, the room was packed with Central Bucks teachers, who have been working under the terms of their old contract that expired last June.

Three teachers spoke during the public comment portion of the meeting, each one following a similar script that pointed out the quality of the faculty, the need for a fair contract settlement, and expressed support for the union negotiating team.