Dollars and cents of the school district

The Matanuska-Susitna Borough School district is facing cuts to its next budget.

The budget is one of the most powerful factors in defining our schools — from staffing, to programs, to facilities. Unfortunately, it appears the reduced budget we are currently formulating for the 2010-2011 school year is only the beginning of an expected line of leaner and leaner budget years. Our budget deficit forces the district to make decisions that are extremely difficult.

Were it not for the federal stimulus package, the district would have contended with extreme budget shortfalls this school year as well. Generally speaking, those stimulus dollars funded 40 regular classroom teaching positions that otherwise would not have been in the schools.

Thankfully, those federal stimulus dollars will continue to cover the 40 regular classroom teaching positions for the 2010-2011 school year. However, after next year, no revenue stream exists to continue coverage of those positions. That’s roughly a $4 million deficit for the district.

Community members, parents and even employees of the district shake their heads and wonder “how could this happen?”

The answer lies in a complex web of details that point out the dollars and cents of the district’s expenses and income, but basically the reason is pretty simple. The district’s rising program costs exceed the increases in available funding. Some examples of how expenses have surpassed funding are illustrated by comparing the rate that costs are increasing with the rate that revenue is increasing. From 2008 to 2009, utility costs rose 11.7 percent. Inflation costs that impact what is paid for paper and other commodities rose 4.6 percent. Property and liability insurance rose 7.99 percent.

By far, the largest expenses for the district are for employee wages, health insurance and retirement program contributions. These costs account for 87 percent of the district’s annual budget and are increasing on an annual basis. Health insurance for employees rose 8.5 to 14.7 percent depending on the employee group. Employer contributions for employee health insurance alone account for 12.6 percent of the district’s operating budget or $21,858,148. Employee salary and wage costs automatically increase 2.5 to 5 percent each year for employees climbing the salary schedule. Negotiated, across-the-board pay raises are layered on top of those increases.

In contrast to these increases in expenses, from last year to this year, the base student allocation only increased 1.82 percent. It is this number that determines state funding of the school district. Borough funding of the district increased less than that at only .86 percent. When expenses across the district rise at approximately 7.2 percent and revenue increases from all sources average only 3.98 percent, the sad result is a reduction in programs, services or jobs if costs cannot otherwise be reduced.

The schools belong to the community. School and district-wide services, programs and accomplishments are rooted in the community’s vision and expectations. The school board is now making tough decisions that will have long-term impacts. The decisions made over the next couple of years will significantly determine what school programs look like and what level of service is delivered. It is important that you keep your legislators, borough assembly members and school board informed of your thoughts on increasing, decreasing or maintaining revenues for the district and how those dollars are used.

The school board begins focused work sessions Wednesday for review of the fiscal year 2011 budget. Additionally, a minimum of two public hearings on the budget are offered by the board on Feb. 3 and 17. You may participate in these meetings by giving comments under the “persons to be heard” portion of the board meetings, submitting written comments to the board and by staying informed.

George Troxel is superintendent of the Mat-Su Borough School District.