Plum school officials are faced with a bigger budget deficit than they were at the same time last year.
During a Plum School Board finance committee meeting on Tuesday, school district manager Eugene Marraccini presented a $59.8 million preliminary draft budget for the 2013-14 school year. That budget currently has a $4.28 million deficit and does not include a tax increase. A copy of the preliminary budget presented at the meeting has been uploaded to the media section of this article.
At this time last year, officials were dealing with a $3 million deficit.
The district's millage rate most likely will be lowered due to the county-wide reassessment. Marraccini said the district's overall assessment jumped from $1.2 billion to $1.6 billion.
Under state law, taxing bodies must adjust millage rates to be "revenue neutral" to prevent an inadvertant tax increase. Currently, the district's rate is 22.2 mills. Marraccini said the "revenue neutral" rate would be in the "high 17s, low 18s."
Because property owners still are appealing their assessments, officials have to "guesstimate" the amount of revenue the district will receive from property taxes. Marraccini is estimating the district will receive $25.5 million, but that number still can be updated.
Marraccini said several factors contribute to the large deficit this year—special education costs, salaries, insurance, technology and, biggest of all, pension contributions.
The district's Public School Employees Retirement System (PSERS) contribution is expected to increase from 12.36 percent to 16.93 percent next school year—a $1.4 million increase (one-third of the deficit amount).
A $1.17 million increase in salaries and wages also has been relfected in the budget. That includes 11 retirees and replacements for all of them.
An 8.75 percent increase ($756,400 increase) in medical insurance premiums also is reflected. However, earlier in the meeting, representatives from Highmark and the AIU said the district could be looking at a 7 percent increase for the HMO plan and a 5 percent increase for the PPO plan.
The budget includes a $375,000 increase in tuition for students who attend cyber and charter schools due to an increase in cost.
Marraccini said about 73 percent of the budget—50 percent in salaries and 23 percent for benefits—is a "fixed" cost.
School board member Joe Tommarello suggested that school board members send their suggestions for closing the deficit gap to administrators before the next finance committee meeting.
"We need to start making these decisions earlier than we did last year," he said.