Norwin projects $2M funding gap
Norwin's director of business affairs braced school board members Monday night for a projected $2 million gap in the 2013-14 budget.
John Wilson will now prepare a more precise preliminary budget for school directors to review. They could consider sending that budget to Harrisburg in January, requesting an OK to hike taxes more than the “index,” which is a state-imposed maximum.
“The benefit to passing the preliminary budget in December or January, it gives you the flexibility that if you want to or need to when it gets to May or June, you can look at those index exceptions. (It) doens't mean you have to do it (raise taxes),” Wilson said. “ ... At this point, we have no idea what the governor's going to propose.”
The state-set limit for a tax increase in Norwin next school year is 1.5 mills, which would generate about $550,000.
Wilson said the district could ask for an exception from that limit under two conditions: retirement costs and special education costs.
If approved, school directors could add an additional tax hike of 1.6 mills to cover retirement and 0.8 mills to cover special education, adding up to a total of 3.9 mills, Wilson said.
Wilson said his preliminary figures are “conservative.”
“It's worst-case scenario,” he said. ... “With November coming along, we're getting close to the deadline where we want to decide if we want to to do a preliminary budget.”
He projects an increase in costs of $3 million but only a $1 million increase in revenue, leaving a $2 million hole.
Several expenses are expected to rise, he said -- debt service, salaries, health insurance, Social Security and retirement.
The district maintains about $4 million in its unreserved fund balance, which could be used to fund ballooning costs.
“It's really the next three years where we have to worry about the retirement stuff, and if we can somehow mitigate that ... with our fund balance that would help,” Wilson said.
Wilson attributes financial woes to costs of charter schools and retirement, along with the recession and a loss of stimulus money.
Superintendent William Kerr said administrators talk about the budget “weekly, if not daily.”
Officials cut more than $2 million from the budget over the last two years, he said. And, he said, making cuts while preserving education can become a tough task.
“We've reduced a lot from our budget the last two years,” Wilson said, “and so it gets more and more difficult as we move forward.”
The district this school year is operating on a budget of $58.9 million. The school board voted in June to raise taxes 1.45 mills, helping to plug a budget gap. Despite the increase, the district's tax rate is the lowest in the county.
Rossilynne Skena is a staff writerfor Trib Total Media. She can be reached at 724-836-6646 or firstname.lastname@example.org.