Personnel cuts possible as New Kensington-Arnold struggles with budget deficit

New Kensington-Arnold School District is considering personnel moves such as offering teachers an early-retirement incentive as administrators and school board members grapple with a projected budget deficit.

Business Manager Jeff McVey told the board Tuesday that personnel is the only area in the budget where significant savings can still be achieved, given that spending in other areas has already been cut as much as possible.

Superintendent John Pallone said some cuts could be possible by not replacing retiring employees. He said the district also could offer a retirement incentive to teachers, one already made to other personnel.

Such offers previously have included an extension of health benefits, he said.

Jason Moore, president of the New Kensington-Arnold Education Association, said he hopes a retirement incentive will eliminate the need for any teachers to lose their jobs. The union has 155 members.

The district already has cut costs by eliminating a number of positions, including clerical and administrative staff, Pallone said.

Pallone said administrators will present a report to the school board with options to consider.

“There’s certain things that we can do that may or may not be a desirable decision,” he said. “We have to look at every option. Some are less pleasing than others.”

Pallone said the board would discuss possible personnel moves within the next two weeks in an executive session that would be closed to the public.

While school board President John Cope has previously expressed opposition to cutting teachers, past-president Bob Pallone has said all options must be considered.

At Tuesday’s meeting, board member Tim Beckes said, “There should be no sacred cows with regard to how to balance the budget.”

Business Manager Jeff McVey said the district’s operating deficit for the 2019-20 school year has been reduced from $770,000 to about $400,000.

McVey said the savings primarily came as a result of the impact of the state-ordered closure of schools because of the covid-19 pandemic, and some savings on transportation costs.

McVey said the district would start the 2020-21 school year with nearly $1.5 million in reserve. With the deficit for next school year now projected at $1.85 million, McVey said the district would need about $360,000 through a tax increase or spending cuts to get through next year, in addition to spending all of its reserve funds.

McVey said the state has given the district permission to increase its property tax rate by up to 7 mills. The district sought an exception from a referendum to exceed its limit — 3.32 mills — because of special education costs.

A 7-mill tax increase would net the district about $781,000, based on a 90% collection rate, McVey said.

Republicans in the state House have proposed freezing school property taxes for 2020-21 because of the pandemic.

Mike Straub, spokesman for House Majority Leader Bryan Cutler, R-Lancaster County, said the legislation passed on a 15-10 committee vote Monday, but it’s not known when the legislation will go before the whole House.

A tax increase has not been worked into the district’s budget yet, McVey said. The board has to approve a proposed final budget by May 31 and then have it on public display for at least 20 days before adopting a final budget by June 30.