Northern Lehigh School District still plans to hold the line on property taxes next year despite a $1.5 million shortfall.
Business Manager Jeremy Melber told the school board on Monday that the governor's budget passed earlier this month has resulted in cuts to the district's basic education subsidy ($618,637); Accountability Block Grant funding ($348,589); EAP tutoring grant ($52,755); and dual enrollment ($18,733), as well as charter school reimbursements.
Also, Melber told the board the district's share of the 2011-12 LCTI budget at present represents a 4.02-percent, or $39,636 increase.
However, Melber said "we are continuing to stay on task for a zero-percent increase."
Superintendent Michael Michaels said it was initially projected the district would lose between 10-12 percent in state funding, when, in fact, it could now lose anywhere from 12-15 percent as a result of the governor's budget.
"This was forced upon us," Michaels said. "We have to come up with plans to give our teachers and students ways to be successful educationally."
Michaels said he feels "terrible for not only the children of Northern Lehigh, but the entire commonwealth [because of the cuts]."
Afterward, Michaels updated the board on a meeting he had recently with state Rep. Julie Harhart (R-Northampton/Lehigh) and state Rep. Joe Brennan (D-Lehigh/Northampton).
"We had a very spirited meeting, and talked about how the budget is affecting education," Michaels said. "Both representatives were very understanding, and they feel the budget we'll know the hardened facts by May."
Melber said the reason for the district's $1.5 million deficit is a combination of the revenue it will lose along with the near $40,000 increase in its share of the LCTI budget. However, he noted that doesn't include any teacher retirements.
"We've had three teachers take the early retirement incentive plan, and we have another five to seven retirements, which [in total] will save the district over $1.1 million," he said. "We're also looking at about three other contingency plans set aside, each of which will save $400,000 to $500,000 to wipe this deficit out."
Earlier in the meeting, the board approved the inclusion of Suzanne Tobing, sixth-grade teacher, and Denise Papay, kindergarten teacher, in the district's 2010-11 Retirement Incentive Plan adopted by the board on Jan. 10.
The board then accepted the retirement/resignation of Tobing, effective Aug. 15, when, at that time, she will begin her retirement from the district after 35 years of service; as well as the retirement/resignation of Papay, effective June 30, 2011, when, at that time, she will begin her retirement from the district after 21 years of service.
Last month, the board approved the inclusion of Ralph L. Williams, fifth grade teacher, in the retirement incentive plan. Also at that time, the board accepted the retirement resignation of Williams from his position as fifth grade teacher after 39 years of service.
Melber said that out of 18 teachers who were present at a meeting last month with district administrators, 11 of them indicated they would likely take part in an employee retirement incentive plan the board created in January.
He said the district would know by April how many teachers will agree to take the early retirement incentive plan.
In January, the board agreed to adopt the plan for all eligible professional employees, on a voluntary basis, for the 2010-11 school year. The creation of an employee retirement incentive plan figures to save the district about $800,000.
The program asks those high-end teachers who account for about $111,000 per position to retire and not be replaced, which would result in a savings of over $1 million with its fund balance and long range plan.
The offer is a one-time only program that enables teachers in the district to submit a letter in writing between then and April 6 that says they will retire from the district, Melber said at that time.
Also at that time, Melber said the district anticipated that between six to 10 teachers would retire, which would save the district anywhere from $700,000 to $900,000 in the 2011-12 budget.
Melber said the district came up with the retirement incentive plan in an effort to lower what was then a projected $1.2 million shortfall in the 2011-12 school year.
As per the program, Melber said the teachers would receive a $25,000 incentive paid into a tax shelter account in two equal amounts of $12,500 on Oct. 31, 2011, and Feb. 8, 2012.
However, Michaels noted at that time there is the potential that some of the vacancies may eventually be filled.
Also at that time, the board unanimously agreed to adopt a resolution to not raise taxes above the Act 1 tax index, which is currently set at 1.9-percent, or, 1.22 mills.
As a result, Melber said the board will now have until May to adopt the 2011-12 preliminary budget. Otherwise, he said the board would have had to adopt a preliminary budget by February.
In December, Melber said a proposed 15 percent increase in insurance costs had been whittled down to 8 percent, or a $190,000 savings to the district. trying to renegotiate that to bring it down even more.
But, with the then expected loss of $825,000 in basic education funding, coupled with a $450,000 increase in salary and benefits, the board was still faced with a $1.2 million deficit, Melber said.
However, he said the district would likely be able to shave about $200,000 from that, which would leave it with about a $1 million deficit that could be offset by the retirement incentive plan.
In November, Melber told the board that the district would likely lose about $1.2 million in state funding in the 2011-12 school year; $825,000 in basic education funding, and another $365,000 in Accountability Block Grant funding.
In June, the board approved the 2010-11 budget with a 2.38 percent, or 1.5 mill increase that raised the millage rate from 62.873 to 64.373 mills in Lehigh and Northampton counties.
That meant a person with a home valued at $100,000, and assessed at $50,000, paid $3,219 in property taxes to the district this year, $75 more than last year's $3,144 rate.