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State College Schools' Budget Gap Could Climb toward $3 Million

on December 20, 2011 2:26 PM

The State College public schools may face a budget gap of nearly $3 million for 2012-13, administrators told the school board Monday night.

Depending on how several budget nuances -- including state-funding decisions -- play out, the district is likely to face a hole between $1.4 million and $2.7 million, Business Administrator Jeffrey Ammerman said.

Administrators indicated they'll develop a balanced budget proposal that follows state tax-increase limits, likely to set the maximum board-imposed increase at 3.3 percent for the year. Superintendent Robert O'Donnell said the administration has "absolutely" no intention to pursue a referendum for an increase above that range.

Difficult cost-cutting decisions are ahead, he acknowledged, as the district looks to contain expenses. The board is expected to approve a preliminary budget by late January. O'Donnell said the administration will aim to develop its fiscal proposals earlier than it did in the last budget cycle, "so that we're responsive to learn" from board input.

"We do want to make sure it's happening earlier than last year," O'Donnell said. "That's one thing we've heard loud and clear."

Still in his first year as State College superintendent, said the administration will emphasize transparency as it addresses the driving components of the budget. Those include personnel expenses, which make up more than 60 percent of district expenditures.

Already, some board members have indicated that a 3.3 percent tax increase is higher than what they'd like to see. Under the state's Act 1, the State College board faces a standard tax-increase limit of 1.7 percent for 2012-13.

Administration projections suggest that limit could climb as high as 3.3 percent if the district applies for -- and receives -- special state exceptions to help cover specific expenses, such as special education and retirement obligations.

But board member Jim Pawelczyk urged caution in the pursuit of those exceptions. He said the district needs to adhere carefully to state accounting standards.

"What we really need to do is to slow down the growth of our budget," said board member Penni Fishbaine. " ... In the end, we're also worried about the referendum for the high school that's coming up."

That referendum, expected within a couple years, will ask voters to decide on funding for an expected State High overhaul. Fishbaine said the district can't keep growing its annual budget and expect to tax more for new facilities later, too.

Board President Ann McGlaughlin aired similar sentiments. She said the district needs to confront its budget drivers now.

"If we cant get those things under control, what makes us think that, two years from now, we're going to have them under control at that point?" she said.

Total expenses for 2012-13 are projected right now in the $118 million range. This marks the third budget cycle that the district has opened with an anticipated gap; each of the last two shortfalls landed in the range of a few million dollars.

Board members have made up the difference through a variety of means, including attrition, outright job cuts and altered programming. Slim growth from the real-estate tax base, increasing fixed expenses and decreasing state support all have contributed to the district's budget pressures in recent years.

The board is expected to finalize the annual district budget by June. Specifics about anticipated state funding won't emerge for a couple more months.

Earlier coverage

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Penn State, State College Noon News & Features: Tuesday, Dec. 20
December 20, 2011 12:20 PM
by StateCollege.com Staff
Penn State, State College Noon News & Features: Tuesday, Dec. 20
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