Budget Questions

Download this as a Word Document

Why is it so difficult to live within 2 ½% annual budget increase?
How does the District respond to increasing costs?
Can’t we reopen the teacher contract to negotiate a lower cost of living?
Have there been any administrative staff reductions?
To what extent does School Choice impact the District’s budget?
Isn’t the risk of accreditation for our High School just hype?

Why is it so difficult to live within 2 1/2% annual budget increase?

As reflected in Table below the majority of District costs are increasing at rates well in excess of the 2 1/2% that is allowed under the levy limit. Notably, this is indicative of the fact that the bulk of the District’s expenses are not discretionary. State and federal mandates for special education, negotiated union contracts for most of the workforce and the inflationary impact of energy costs are all outside the direct control of the Leadership Team, Administration, and the School Committee.

Driver FY 09 Budget $ Change % Change % Total Budget
Salaries † $12,967,904 $309,353 2% 48%
Special Education * $6,819,628 $1,166,517 21% 25%
Insurance, Pension, Taxes ^ $3,652,431
$512,737 16% 14%
Maintenance & Utilities $1,525,587 $203,765 15% 6%
All (non SPED) salaries: instructional, support, administrative, and stipends
* SPED: salaries, out-of-district tuition, contracted services, and transportation
^ All insurance, Pensions: Essex County Retirement & Social Security (teacher retirement is self-funded) Taxes: includes unemployment.

How does the District respond to increasing costs?

In the area of special education the District has been and continues to develop in-district service delivery models for more of our SPED students and as a result is decreasing costs by sending fewer students out of district. In FY08 the implementation of a K-1 program for severely disabled students and a freshman alternative program saved the District $251,294. We anticipate similar savings from the Intensive Reading/Writing program that we will implement in FY09.

In relation to energy costs the District maintains the state’s minimum standards for heat controls, conducts regular HVAC maintenance, and implements the State’s energy savings initiatives. Additionally, the District shares services with the two towns for grounds and maintenance, technology and IT services, and also shares maintenance services with Wenham for two buses owned by the District. Lastly, the District participates in a collaborative purchase program for oil deliveries with the City of Gloucester and the Town of Topsfield.

Can’t we reopen the teacher contract to negotiate a lower cost of living?

The district bargained in good faith with its employees and as such our contract is a binding three year agreement that we spent substantial time negotiating. Notable as well is the fact that at an average of $55,954 our teacher salaries are below the statewide average of $58,231 and average when compared to peer districts.

When negotiating a contract the School Committee, as with all the costs of school services, analyzes the needs of our District within the context of our budget situation. One of those needs is the ability to recruit and maintain good teachers. One of the reasons HWRSD provides a high-quality education is the quality of its staff members. Education research confirms that the quality and preparation of the teaching staff is directly tied to educational outcomes.

Additionally, the District has a 60%-40% cost share for health insurance for teachers (as well as all employees) which is one of the lowest for school district and municipalities in the Commonwealth. Additionally, in the last three years, all collective bargaining units voluntarily increased their out-of-pocket co-payments and prescription costs and changed the health insurance carrier to save $240K in costs. Lastly, the District does not pay into the teacher retirement program; teachers contribute to this system which is supported by state revenue. The HWRSD does contribute to a retirement system for non-teaching staff.

Have there been any administrative staff reductions?

Yes there have. The three elementary principals along with elementary secretaries now have eleven month contracts down from twelve months. In addition, this year’s budget contains a .5 clerical reduction at the middle school level. Due to increasing mandated reporting requirements further staff reduction in this area could subject the district to additional citations which may jeopardize funding. Remember that administrative staff salaries are a small percentage of the overall budget compared to instructional salaries which account for almost half the budget. The District cannot significantly cut costs without cutting teachers. Decisions about which positions would be cut involves a balancing of the need to keep class sizes from growing too large with the need for the significant support provided to the students and to the classroom teacher by other staff members (including nurses, guidance counselors, teaching assistants). The services provided by all of our staff members are integral to the quality of the educational services we provide.

To what extent does School Choice impact the District’s budget?

The admission of school choice students has a positive effect on the budget because it represents a source of revenue ($581,566 for FY09) at a negligible marginal cost to the District. Direct costs attributable to choice students are instructional materials of approximately $190 annually per student.

The admission of choice students does not require the District to add classes or teachers and does not prevent it from making reductions that would be dictated by a declining student population at a given grade level; rather, choice students allow the District to use available capacity and receive additional revenue.

By law, each year the School Committee reviews and votes on school choice participation to ensure that it continues to make sense for the District. The SC must vote which grades will have choice and what number of students can be admitted. The district can not select specific students for the school choice applications to attend school in HW; it can only select the a number of students it can accommodate annually.

Isn’t the risk of accreditation for our High School just hype?

Maintaining NEASC (New England Association of Schools and Colleges) accreditation is required for the High School’s diplomas to be recognized by colleges and universities. One of NEASC’s overarching requirements is that the HWRSD have a consistent and reliable source of funding to support the school’s educational programs and services, and its facility. The fact that last May the towns passed an override which was $956,097 short of the amount needed to maintain level services for FY 2008 is indicative of non-compliance and has put the District under additional scrutiny. Should this year’s $1.889 million override not pass, with the resulting reductions to programs and staff NEASC could respond with a warning which precedes probationary status and ultimately loss of accreditation. Any of these developments will adversely affect our seniors who apply to colleges and universities. Currently there are 10 schools in the state that are on probation mostly due to funding issues.

Comments are closed.