Politics & Government

Officials: School Budget Won't Fuel Tax Increase

The Board of Education budget will have less of an impact on whether taxes increase as will other items on the town's side of the budget, including the pension fund and the town's self-insured medical plan.

 

While the focus is currently on the Board of Education's proposed 2012-13 budget, it really has less of an impact on taxes as aspects of the town budget, according to one school board member who until last year led the Legislative Council.

Jim Pascarella served on the council for six years, stepping down last fall. But he wasn't out of the public eye long -- the school board chose him in January to replace Myron Hul, who chose to resign from the board.

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Prior to serving on the Legislative Council, Pascarella served on the school board, so he has the knowledge to speak from both perspectives.

The drivers that result in budget increases are more on the town side than the school side, Pascarella said, with the two largest being the town's self-insured health care fund and the pension fund.

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Several years ago the school board's medical insurance accounts were transferred to the town side of the budget so medical coverage could be purchased in bulk for both town and school employees.

But the school employees don't participate in the pension fund, which covers town employees after their retirement. That fund is at a crisis point as years of underfunding has left it funded far below auditor's expectations.

The medical insurance fund has doubled i the past six years, Pascarella said, while the school board budget in that time has increased only 7.1 percent.

"One can see that the Board of Education is not driving the town budget," he said. "And the other issue -- the pension fund -- the board has no involvement in."

Actuary's recommendations call for a $20 million contribution to the fund but that account has only see funding of $3 million. 

And three years ago, there was an $8 million deficit in the town's medical plan, Pascarella said. It was covered, but at a high cost -- depleting the town's general fund, which once stood at $6 million, down to $500,000.

And while the proposed 2012-13 budget carries with it the largest increase in three years -- 3.1 percent -- that's in large part due to "two major drivers," Pascarella said --  the loss of about $1 million in American Recovery and Reinvestment federal dollars, and an increase of almost a million dollars in special education costs.

Prior to this year, the board saw increases of only 1 percent or less for the last several years.

The state reimburses the town for overruns in special education costs, and the district has about $1.5 million of those dollars put away, Pascarella said.

"This budget does not contemplate using the $1.5 million that the council approved putting in to an account," he said. "Our hope is to not use it, or use it in the event of special education costs exceeding projections, since that is a variable beyond our control. Otherwise, it could be used for capital projects."

With the general fund hoovering around a half a million dollars, it's essential that the board not find itself in the position of asking the town for more money as it did last year, he said.

When the state reimburses the special education overruns, that money goes to the town, not the Board of Education, and the school board can ask for it if it needs it. But in the past 10 years, that has rarely happened and the council has appropriated the funds as needed.

But last year the school board found itself in need of about $1.5 million that the town had already spend, so an agreement was worked out to transfer this year's reimbursements to the school board for last year's overruns. The board also made additional cuts in its 2011-12 approved budget so plug some of the hole.

"We need to leave the $1.5 million available because it is essentially the only emergency money available to us," Pascarella said, pointing out that the town's coffers are all but dry. "I think this is a better arrangement for the taxpayers, though it may not seem that way because of the budget increase."

Board member Lesley DeNardis disagreed, saying that the money the state reimburses for special education overruns rightly belongs to the school board, not the town, and the town should not have control over it.

"The purpose of the funds is not to provide a savings account for the town but belongs to the district because special education costs are so highly variable," she said. "I really this this was not intended to be a cushion for the town."

The state reimbursement money has never been automatically transferred to the district, Pascarella said. But the fund that has been established is earmarked solely for education purposes, he said, and is necessary because if not for it, the town can't afford to pay those costs.

Already this year, it's estimated that special education cost overruns could top $1.2 million, board chairman Michael D'Agostino said.

 


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