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McKeesport school directors ask for state mandate reform

| Thursday, April 25, 2013, 3:41 a.m.

McKeesport Area School District is urging state lawmakers to reform mandates that are draining district budgets.

Directors adopted two resolutions calling for reform at Wednesday's school board meeting — one in the funding of the Pennsylvania Public School Employees Retirement System and the other in the funding formula for charter and cyber schools.

“We've all heard about sequestration issues and those are going to affect us,” Superintendent Timothy Gabauer said. “Pension (obligations) and charter school funding are major issues for our district and other districts out there. Many are unified in putting out resolutions for reform.”

McKeesport Area administrators have identified extreme costs as a problem with the employer contribution rate for public school employee pensions. The rate has increased from 5.64 percent in 2010-11 to 16.93 for 2013-14. That threefold increase over the past three years will translate to a 31.43 percent contribution in 2034-35, if increases continue at the same rate.

In McKeesport Area's budget, the district contributed $1,582,380 in 2010-11, and the projected contribution for 2013-14 is $4,530,171. By 2017-18, the figure could reach $8,443,003.

“The resolution gets into some detail offering (the state) to identify other funding sources and how to deal with this pension issue than what is being proposed at this time,” he said.

Gabauer also identified flaws in the public school code's formula to fund charter and cyber-charter schools based on a student's home district's prior year average of budgeted pupil expenditures rather than the charter or cyber-charter school's actual cost to educate each student.

“The state's flawed charter school funding formula is costing taxpayers hundreds of millions in additional tax dollars, as Pennsylvania's school districts are facing unprecedented economic challenges,” Gabauer read from the resolution.

McKeesport Area's charter and cyber-charter expenditures over the last five years increased from $2,944,782 in 2008-09 to $4,309,785 in 2012-13. State reimbursement for charter school costs was eliminated in 2011-12, putting 100 percent of the funding burden on public school systems.

As business manager David Seropian informed school directors last week, Gabauer confirmed much of McKeesport Area's budgetary concerns weigh heavily on these issues.

After months of development, Seropian shared with school directors the first public draft of a preliminary budget for the 2013-14 academic year.

The plan is balanced at $60,384,041 — an increase in more than $1.3 million from 2012-13. The property tax rate is drafted at 15.22 mills — a 2.27 mill decrease from the current rate, based on a proportional increase in Allegheny County's 2013 property assessments. An actual revenue-neutral property tax rate would be 14.9 mills, but the district is permitted without referendum to increase that rate based on the Act 1 index that brings it to 15.22.

“It is a work in progress,” he said, noting that the board will pass a preliminary budget in May and adopt an official budget and millage rate before June 30. “Between now and then, I'm sure a lot of things will change.”

By June 30, the district's fund balance is projected to hold approximately $5.3 million. The preliminary budget calls for use of $4.3 million of that reserve.

“I think it's pretty obvious that we need to make adjustments between now and the final budget,” Seropian said. “We need to get that number down. We cannot rely on that much of a fund balance in one year. This is about where we stood last year at this time ... and we fully expect to get this down.”

Jennifer R. Vertullo is a staff writer for Trib Total Media. She can be reached at 412-664-9161, ext. 1956, or