Included in this report are department requests and expenditure reviews that take place every year prior to the Lancaster Central School District (LCSD) putting out a budget for public review and approval.|
(Cost increases based on assumptions for now as teacher contract negotiations continue)
For now, whereas $19.18 million was budgeted in the 2010-11 year for total benefit expenditure, the tentative budget proposal forecasts a $22.121 million 2011-12 budget; an increase of $2.939 million, 15.32%.
The following are but some of the employee benefits expenditures that are incurred in the District budget. Dependent on non instructional and teacher contract negotiation settlements the numbers could change:
9010-800: State Retirement for non instructional staff increases from $987,616 in 2010-11 to $2.05 million in the 2011-12 budget proposal; an increase of $1.06 million, 107.21%. The mandated rate that the District pays into the retirement system based on salary increased from 11.34 to 15.6%.
9020-800: Teacher Retirement contribution by the District increases from $3.43 million in 2010-11 budget to $4.34 in the 2011-12 budget; an increase of $915,444, 26.69%. The mandated rate the District pays into the retirement system based on salary has increased from 8.62% to 11.5%. Teachers contribute an additional 3% into the system.
9030-800: Social Security increases from $3.56 million to $3.66 in the 2011-12 budget; an increase of $106,707, 3.00%.
9040-800: Workers Compensation cost increases from $904,960 to $932,109; a $27,149 increase, 3%.
9060-800: Hospital & Medical Insurance costs increase from $8.41 million to $9.11 million; an increase of $669,333, 8.31%.
9065-800: Dental Insurance coverage increase from $1.11 million to $1.22 million; an increase of $110,888, 10%.
9066-800: Eye Glass Insurance coverage increases from $126,743 to $139,417; an increase of $12,674, 10%.
How can a taxpayer not question the fiscal responsibility of a contract request for a salary increase percent of 4.59%, where benefit costs are increasing by 15.32%; costs absorbed by the District, meaning the taxpayer?
Using Fact-finder recommendation, a teacher earning $60,000 will have contributed $1,350, $1,500 and $1,650 for a total of $4,500 (not considering premium increase) for health insurance, as the contribution percentage will increase by 1% per year over the life of a three-year contract; where the teacher will contribute 11% in place of the current 8% . Considering the teacher would have had to contribute $1,200 x 0.08 x 3 = $3,600 over three years regardless, they will be contributing but $900 more over the life of the three-year contract.
Contributing 11% to health care in the last year of the family plan contract, that teacher will be paying $137.50 a month. They now pay $100 per month for the best family plan available; and that includes dental and vision.
Using the fact-finder recommendation, over the life of the contract at an annual $60,000 salary, that teacher’s accumulated earnings will be $2,970, $3,117 and $3,271 = $9,358.
$9,358 – $900 = $8,458. Considering the significant increase in benefit costs, why should a taxpayer not feel the fact-finder recommendation is too generous a contract in today’s economic climate. Would such a generous contract necessitate cutting teacher staff, cutting AP programs and result in larger class sizes? Everything should be on the table for consideration.
The budget request increases spending by 4.16%; from $6.55 million to $6.83. Gas and oil, and the request to upgrade the rapid communication system were the big ticket items.
Operation & Maintenance
The budget request increases spending by 5.07%; from $7.46 million to $7.84 million. Big ticket items include fuel, electricity, equipment (snow removal) and paving/striping.
Debt service increases by 2.47%; from $5.51 million to $6.69 million. Interest return on reserves down to 0.25%.
Proposed Bus Purchases
The District proposes the purchase of ten (10) buses (65 passengers) at a cost of $1.14 million. The purchase money will come from a reserve fund and will have no tax impact.
The tax cap may be delayed until the 2013-14 school year.
$4 million of fund balance money was used to cover last year’s budget. The same amount will most likely be used this year as revenue toward the budget. In total $9 million was used in fund balance and other reserves last year to balance the budget. Near the same amount may have to be used this year to balance the budget as revenues are down $1.25 million and expenditures are up several million. At such rate of use the bank will be broke in 2-1/2 years.
This is the last year of the federal stimulus money ($1.7 million).
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