Apr 1, 2002 By Patty Shultz 3 min read

CONNELLSVILLE – A minimal increase in the state allocation and rising insurance costs and retirement contributions may force taxpayers to dig deeper in their pockets to balance the Connellsville Area School District’s upcoming budget. School district business manager William Harper speculates he will once again advise the school board to raise taxes to help balance the 2002-2003 spending plan.

“Right now, we’re looking at a $3 million deficit, and there is no way we can cut that much from the budget,” he said. “We’re going to have to do something.”

Board members and administrators will get their first look at the Harper-drafted spending plan tonight during a special budget work session. While he is able to anticipate costs associated with salaries and educational programs, other expenditures, such as insurance rates, are speculative in the preliminary budget.

“I’m hearing that some of our insurance rates are going to be more than doubled for next year,” he said, noting the escalated rates are tied to the Sept. 11 attacks. “Until (insurers) decide what they’re going to do, we aren’t sure what our rates are going to be for the district.”

In 2001-2002, the district budgeted $4.7 million for employee benefit insurance packages and other district insurance coverage.

Other unknown factors include how many members of the district’s staff plan to retire. Harper said 48 employees are eligible for regular retirement, while 36 others can opt for an early retirement.

“Unfortunately, no one lets us know early,” he said, noting the retirements translate into savings for the district.

In a related issue, the district is facing an increase in retirement payments stemming from legislative action last year that boosted pensions by 25 percent. Due to poorly performing retirement investments, the Public School Employees’ Retirement System, in December, increased the employer contribution rate for 2002-2003 from 1.09 percent to 5.64 percent to cover the losses.

The increase will cost the district more than $600,000, said Harper.

The district will see very little additional revenue from the state to counter escalating expenditures if legislators fail to boost the 1 percent basic subsidy increase that Gov. Mark S. Schweiker is proposing in his budget.

Last year, the district received about $33 million in overall state aid. The budget for the current year is about $50 million.

Harper said district administrators have been told that local legislators are unhappy with the minimal increase and plan to lobby for a more substantial amount.

“Unfortunately, our budget has to be submitted to the (state) Department of Education by June 30, the same day the state is required to have its numbers finalized,” he said.

With so many unknowns, Harper speculated that the administration and board would have to look at alternatives for correcting the revenue shortfall or slashing programs and reducing staff in order to balance the budget.

The board does have the option, as it did last year, to dip into the district’s fund balance, which stands at $4.5 million, but Harper said he would recommend that no more than $1 million be withdrawn from the account.

The limitation is tied to the impending Springfield Township Elementary School construction project. Harper said the district will seek bond issues, and the lending rates it gets will depend on the amount in its savings account.

“We’ll obtain better rates if our fund balance is more substantial,” he said.

Harper would not speculate as to what direction the board will take to balance the budget.

“If they want to keep the programs, they’re going to have to find the money,” he said.

The work session is scheduled to begin at 7 p.m. in the high school cafeteria.