Early Plum budget has $1.5 million deficit
Officials in local municipalities are completing the budgets that council members are expected to vote on in the next couple of months.
In Plum, school officials also are working on the district's 2014-15 budget that board members typically vote on each June.
Superintendent Timothy Glasspool told board members during last week's finance committee meeting that preliminary estimates show the $58 million draft has a $1.5 million deficit.
“We're not going to have it (enough of a reserve to balance the spending plan),” board member Richard Zucco said.
District business manager Eugene Marraccini said current estimates place the district's fund balance around $1 million after all bills are paid next year from the 2013-14 school year.
Board members in June voted to take $950,000 from the budget reserve to balance the 2013-14 spending plan.
The board also voted to eliminate the family and consumer sciences program to help balance the current $56 million budget. Three teachers were furloughed.
Glasspool said the deficit could increase because teacher salaries that currently make up $21 million of the budget are projected at the rate under the current contract with no raises. The current contract expires Aug. 31, 2014. Negotiations on a new contract are set to begin in January.
Board member Sal Colella said the projected deficit would be about $900,000 higher if the board earlier this year would have agreed to extend the teacher contract for a year.
Colella said a one-year extension would have included raises and other costs. The Plum Borough Education Association, or PBEA, which represents the district's teachers contended a contract extension would have resulted in an additional $727,758 in salaries.
The PBEA had offered half a million dollars in concessions, in part by teacher-salary reductions for the 2013-14 school year, board member Kevin Dowdell said previously. The concession offer was in response to the board asking the union to help eliminate a portion of the budget deficit.
Dowdell said the talks broke down when the board decided against a one-year teacher contract extension through August 31, 2015. Negotiations on a new teacher contract are expected to begin in January.
Dowdell predicts the deficit will be more than $2 million when new contracts are negotiated.
Glasspool told board members that about $1.2 million of the $1.5 million projected deficit is due to anticipated increases in health care costs, as well as the district's projected contribution to the Public School Employees' Retirement System, or PSERS.
Marraccini said health insurance premiums are expected to rise by about 12 percent.
Glasspool said he will update the board if any projected costs change over the next couple of months. The superintendent plans to present a full budget to the board for consideration in January — the deadline for adopting a budget when district officials are planning to seek exceptions in order to increase taxes higher than the prescribed index.
A school board that adopts a preliminary budget with real estate taxes that exceed its index may seek approval for referendum exceptions to increase tax rates by more than its adjusted index, according to the Pennsylvania Department of Education website.
Glasspool said increasing the tax rate to the index would net the district about $400,000.
District Solicitor Lee Price said the district potentially could ask for exceptions because of PSERS contributions and special-education expenditures.
Karen Zapf is a staff writer for Trib Total Media. She can be reached at 412-856-7400 ext. 8753 or firstname.lastname@example.org.