At the school board meeting on September 19, 2012, Superintendent Morse and Business Administrator Caswell announced that the district would have an additional $500,000 expense in FY14. The money is the increase in the employer's contribution to the state employees' retirement system. This brings to $1.2 Millon that amount that needs to be cut for the FY14 dollar amount to remain the same as FY13. (Actually, the figure is larger -- there's another 1% cut needed to offset the ending of the spending down of the fund balance. And there are some large capital expenses in our future. I'm going to ignore both of these for the rest of this post.) A flat (zero dollar increase) budget has been our goal since last May, when the board directed the superintendent to prepare a budget with "level funding".
Previously, the business administrator had announced that achieving a flat budget would entail $700,000 in cuts to offset contracted increases net of savings (see the budget section of the last roundup). This was in line with inflation, which is running at 1.5% to 2% (1.75% of $38.3M = $670,000). With the announcement of the new retirement expense, the superintendent's job just got $500,000 more difficult. While new revenue and additional non-staff savings might help some, it is likely that $1.2M in cuts will result in a large layoff of staff. (Here's an article on how Exeter is affected by the new retirement costs.)
The increased costs appear to be the result of the state eliminating their contribution to state employee retirement plans. The current rates have the district contributing 9.09% of teachers' salary and the state 4.88%. The new rates (released on September 11, 2012) have the district contributing 14.16% and the state zero. In other words, the state shifted a cost equal to about 5% of teachers' salary to the district.
The contribution is divided into 82.5% pension and 17.5% medical subsidy. I'm no expert on the retirement system, but I believe this medical subsidy has nothing to do with the care teachers get while their employed. It's for their retirement or their beneficiaries. I've been referring to it all as retirement costs, and I think that's pretty accurate.
[Math check: Working backwards, $500,000 / 5% = $10M salary. We often hear 80% of our $38.3M budget is personnel, so that's $30 M. Obviously not all of the $30M is for teachers, and not all of that is salary, but I'm not totally sure how to reconcile these. It's probably more complicated than I understand.]
I've largely avoided party politics on this blog, but to the extent bills are proposed and laws passed that affect our district and public education in general in New Hampshire, it's relevant here. The current state legislature really doesn't like public education. They have passed a bunch of laws: vouchers, empowering parents to dictate curriculum, cost shifting to local districts, halving the support to state colleges, and more. Each of these laws weakens public education in its own way. Bill Duncan at Defending New Hampshire Public Education has done an excellent job keeping track of the dozens of education-related bills percolating through the New Hampshire legislature.
Republicans hold veto-proof super-majorities in both the NH house and senate. They are dominated by the Tea Party folks who were swept into office in November, 2010. It's hard to come to any conclusion other than these Republicans are harmful to public education. I'm voting for Democrats on November 6th, 44 days from now. If I lived in District 3, I'd enthusiastically vote for Bill Duncan for Executive Council.
Back to ORCSD. Superintendent Morse reported that only one teacher so far has opted for the retirement incentives approved by the board. I believe he said that the guild has requested that the offer be kept open through the end of October, which he agreed to do. I'm sure the teachers, like everyone else in the community, want to see how the school board reacts when confronted with the prospect of large layoffs for a flat budget. I'm not sure they'll find out by the end of October.
The board and the district have begun work on the FY14 budget, which covers July 2013 through June 2014. Over the next few months, the board will make its decisions and produce a budget for the public's approval. The public gets to vote on modifying the proposed FY14 budget at the deliberative session in February 2013. The final budget goes to the voters for approval on election day in March 2013.
|Tax Cap threat in the public file, click to enlarge.|
There's still ample opportunity to express your opinion before the deliberative session. You might consider writing a letter to the board. For example, you might threaten to organize a campaign to impose a district tax cap if taxes look like they'll increase too much. You could express your regret that you failed to support the lawbreaking board members in their efforts to cut costs more deeply before they lost reelection in a landslide. You could call the 0.4% added by the taxpayers during the deliberative session a "large add back" while neglecting the fact that the budget passed by your board of cutters increased taxes by 3%. But one of your neighbors already beat you to it (see right).
I don't agree with Mr. McClurken about tax caps, and if the possibility gets more real I will certainly delve into why I think a tax cap is a terrible idea. But I do very much appreciate Mr. McClurken's detailed and informative report. Here's a version from last spring. I look forward to the update.
Maybe threatening letters aren't your style. Come to a school board meeting and make your feelings about teacher layoffs and program cuts known. You might express your concern that deep cuts will impact school quality, test scores, and ultimately property values. You might think keeping taxes down, programs up, and teachers employed by accepting Newmarket tuition students is a good idea. You might think it's a good idea to raise revenue by expanding the day care and charging for full day Kindergarten. You might have a brand new great idea. There are plenty of chances to get involved between now and the deliberative session, so don't be shy.