Council, school committee hold preliminary budget talks
The Jamestown School Committee outlined its current and future budget concerns for the Town Council. The informal discussion was held in anticipation of the pending deliberations on the town’s 2011- 2012 budget.
The joint work session meeting was held on Dec. 20. A scheduled discussion on wind turbines was not held because the Council had not formally voted to hold that session during its regular meeting on Dec. 13.
Committee Chairwoman Catherine Kaiser told the councilors that there was “nothing new” to flag for their attention. However, she also referred to the federal stimulus grants which have helped fund municipal school budgets – and which will expire in the third quarter of 2011.
“The big question is: what will the state do [to fill that gap]?” Kaiser said.
Town Administrator Bruce Keiser noted that Governor-elect Lincoln Chafee didn’t tip his cards during a recent forum at Rhode Island College, although “[Chafee] said that education would be his number one priority.”
Keiser added that Chafee still plans to seek a one-percent salestax increase on currently-exempted products such as food and clothing, which, Chafee predicts, would shave $120 million off the state’s $300-million deficit. Keiser said that reducing the deficit by such a large percentage wouldn’t necessarily result in any additional aid to schools, but “it would provide the [Rhode Island] General Assembly with additional budget flexibility for the next fiscal year.”
“If the deficit isn’t reduced, it will be much more difficult for the Assembly to retain the current levels of educational aid,” Keiser said.
Under an existing, long-term plan to redistribute school aid, the state intends to reduce its assistance to some school districts while increasing aid to others. Under the plan, Jamestown will lose approximately $20,000 a year for the next 10 years. However, if the federal stimulus money isn’t replaced, and “the pot is smaller, would we lose more [than $20,000 a year]?” Kaiser said. “Probably.”
Although $20,000 a year is only a small percentage of Jamestown’s annual school budget – which is $12.53 million for the current fiscal year – the district is strained by a variety of unfunded mandates.
For example, School Superintendent Marcia Lukon pointed out that the new valuation system is forcing administrative staff to spend much more time on data entry. Lukon was referring to the Uniform Chart of Accounts: a state-mandated system requiring every school to account for each of its expenditures under a meticulous procedure.
At the same time, all the schools have to perform much more rigorous student testing and teacher evaluations to comply with the requirements of the No-Child-Left-Behind and Race-to-the-Top programs.
Despite the increasing demands on staff time, the district has tried to keep its upcoming budget request as flat as possible by, among other things, achieving some expense reductions in its negotiations with the teachers union – especially on the health-benefits side, where costs have been soaring at double-digit rates.
Under the agreement, the teachers agreed to increased co-pays in their medical insurance. They also agreed to give up the “step increase” in their salaries for the duration of the agreement. Although the contract for support staff doesn’t expire this year, Lukon noted that she would now have to return to the table to start negotiations with non-union personnel, meaning department heads and principals.
The results of these negotiations will be quantitatively evident in the first week of March, when Keiser presents the school district’s proposed budget to the Council. “Everything we’ve done has been focused in the right direction,” Lukon said.
However, besides the questions about state and federal aid to the schools – which won’t be answered before the Financial Town Meeting – there is a question about state funding for teacher pensions.
“The state shares the cost of teacher retirement funding with school districts,” Keiser said. “In the past, the General Assembly has changed the ratio – the balance between the state and local share – as a way of addressing state-level budget problems by shifting more of the costs to the school districts. That is an unknown, and we won’t know if that balance will change, again, until the end of the state budget process.”
There is also the question of student enrollments from military families. If teenage enrollments increase, the town has to spend more to send those kids to North Kingstown High School. Lukon said that there are fewer kids from military families enrolled in Jamestown schools this year, but it isn’t safe to assume that the number won’t jump in September.
Nevertheless, the district has a “healthy” fund balance, Keiser said. He said that the balance amounts to approximately $1.25 million. Similarly, he added, “The town is in fairly good shape.”
That’s good news for the district because it will have to rely on the town to fund any proposed increase in its budget, and also because, as Kaiser pointed out, “Regardless of how we project our budget, we won’t have any new income, which is different from the town side.”
The additional, town-side income will come from an increase in real-estate values. As Keiser pointed out, “We’re expecting a one-percent increase in our property tax base [which would be around $20 million].” He also saidt that despite the slump in real-estate sales, “We’ve seen an increase in building permits issued for new construction, renovations and expansions.”
At the same time, there’s a state cap on property-tax increases, so any significant hike in the school budget would be limited by the maximum allowable increase: 4.25 percent. At the last Financial Town Meeting, residents passed a one-percent increase in the property tax rate, which was far below the maximum. Keiser is hopeful that the School Committee’s budget request will be as flat as possible; however, an additional property-tax increase in support of that budget, while not necessarily likely, is not beyond the realm of possibility.
The town was able to keep its 2010-11 property-tax increase at a modest level because of layoffs, salary freezes for all town employees, and adjustments in health insurance benefits.
However, even though the town has reached what Keiser described as “fair and equitable” contract agreements with the police, administrative staff, and public works employees – leaving only the clerical workers awaiting a new contract – the terms of the agreements don’t preclude an increase in municipal costs for health insurance.
“We have been informed by Blue Cross,” Keiser said, “that the premium for our traditional health care plan could increase 15 percent.”