Economics Driving TESD’s Budget Woes . . . EIT to Be Explored

Ray Clarke attended the TESD Budget Workshop last night and provides the following commentary.  I am fascinated that the school district is bringing EIT out of hiding.   There is much misunderstanding about Earned Income Tax – we need an open and thorough airing of EIT.  I would suggest that the TESD and township partner for the discussion, have an outside expert give a presentation (like Easttown Twp did for its residents).  The presentation should be taped and then shown repeatedly on both the school district and township cable networks.  Some people hear ‘tax’ in the Earned Income and then simply shut-down. 

Whether it is the township or the school district we are talking about — we are currently facing tremendous economic hardship and all revenue sources must be explored.  Personally, I don’t want to pay more taxes and my personal household will suffer with EIT (my husband works for Unisys) however, . . .  there is also a reality to the situation.  I applaud the School Board for recognizing the need to explore Earned Income Tax and would hope that the Tredyffrin’s supervisors would be likewise motivatedit’s called exploring options.  Both the township and the school district have been faced with major deficits in their budgets that have required cuts in personnel, services, programming in an attempt to close the gap.  But to what end can we continue to make these cuts?  At what point do we weigh the quality of life that all enjoy in this community vs. increase in taxes?  I do not see how continuing to say, no new taxes  is a long-term solution to the problem.  Comments?

A quick report from the Budget workshop. Only 25 or so residents tonight, probably reflecting that there was little discussion of program changes. The occasion was used mostly to lay out a framework, stake out some board member positions, and set up the important April 12 Finance Committee meeting where the next level of expense reductions will be discussed.

However there were some really significant outcomes, worthy of full attention.

The basic parameters being positioned to balance the budget are:
– Implement the $4 million of expense reductions already discussed
– Tax to the full 2.9% cap
– Use $2 million of fund balance
– Find at least $0.7 million of 2010/11 reductions from $1.5 million of mostly non-educational strategies
Round numbers, subject to tweaking up or down.

The principal dissent came from Dr Brake, who is not thrilled with the proposed changes to the Middle School program. He seems to be the only one on the other side of this.

Dan Waters and Kevin Mahoney lost few opportunities to highlight the fact that these 2010/11 actions leave the structural problem untouched (shades of Tredyffrin’s “structural deficit”!). And they are right: 50% of the $4 million is one year only, and of course the fund balance use can’t continue for ever. The deficit for 2011/12 after the above programs would still be $7.5 million (8.2 – 0.7).

So, the administration is going to do the following:
– Deepen the study of the $2.6 million of class size, CHS period changes, etc. that – practically – can not be implemented until 2011/12. (Strategies 47-56, approximately.) If all were implemented, the deficit would be down to $4.9 million.
– Study the implementation of an income tax. Taxing to a likely 2% Act 1 property tax cap next year would still leave the district $3 million short, so this – to me – seems inescapable.

Some EIT information that’s new to me, and definitely has a major impact on the revenues for TESD: Kevin Mahoney stated that there is the potential to reclaim not only taxes paid to neighboring municipalities, but also to Philadelphia (which would apparently get reimbursed from gaming revenues).

Kevin Grewell has posted a lot of helpful EIT information here. Important features confirmed tonight appear to be that this would be implemented under Act 511, which is coordinated with the Townships. Resident tax is split between School District and the townships, non-resident money is collected by the Township (which turns out to be looking at fire department funding).

Debbie Bookstaber (from the last TSC) asked that the study include a comparison of an EIT and a PIT.

The Board took pains to emphasize that program changes must be fully vetted, particularly in the Education Committee, and subject to public input. Back to that April 12th meeting. Also, decisions will need to be made soon on the health insurance funding and bond issuance as part of the $4 million 2010/11 programs – the former in particular being highly susceptible to assumptions. I’d like to be convinced that all aspects of utilization risk have been thought through

Further School Budget Discussion . . . How will the District fund the gap?

Tonight is an important TESD Budget Workshop — 7:30 PM, auditorium at Conestoga High School.  Yesterday, I posted the agenda and materials for review.  This is our school district and our taxpayer dollars . . . how do you want your dollars spent and how do we fund the district deficit?

There have been many budget-related comments today on Community Matters — several of which were focused on EIT.  For further discussion, below is a commentary received from Ray Clarke.  In the past, Ray has offered his opinion on EIT but has updated his remarks based on TESD’s  current 2010-11 budget information.  Here are Ray’s comments — let’s use this as a starting point for discussion:

I’d like to get away from history (except as a guide to the future) and ponder what needs to be done to secure our kids’ education going forward. I think much of the evidence supports John’s advocacy of an EIT. I’ve posted it here before but here goes again, starting with updated budget numbers:

1. After one round of proposed program changes that have been vehemently opposed by many in the community, plus a 2.9% property tax increase, the school district will still be in the hole by $3 million in 2010/11, $8 million in 2011/12. (Note that it is relatively easy to squeeze expenses for just one year…..). No official word from Tredyffrin yet, but the township will need to fund contracted compensation increases next year, too.

2. A 1% EIT would raise $9 million for both Tredyffrin township and school district, of which $2.7 million is already paid by residents and $2 million would be paid by non-residents. (Easttown would also have to implement the tax.)

3. Perhaps a 2010 Tax Study Commission would ask a question like: “Would you prefer that property taxes increase 15% for all, or that the township residents not now paying a 1% EIT do so and the township gets a 1 for 1 match, worth $4.7 million a year now and increasing with inflation?” Might there be a different answer than to 2007’s question, which referenced only shifting taxes from property to income?

4. There will be in 2011 a county-wide mechanism to collect an EIT at low cost for all the other townships with this tax.

5. An EIT diversifies the tax base among all income earners and wealth holders.

6. The TSC stated that: “Had we been presented with compelling funding needs by the school board that could not be satisfied by the present system we may well have endorsed a change in the manner in which our schools are funded.”

So, given that …

 – There is no willingness by the TEEA to consider deferring accelerating teacher salary increases (6.9% in 2009/10 over 2008/9, and more contracted each year until 2011/12) and sharing health benefit cost increases

 – We need to fund $4 million a year in replacement capital and the capital fund is running dry

– There is no willingness to unlock capital tied up in unproductive properties (note: enrollment is projected to decline in the short and medium term)

 – $2 million of the $4 million proposed expense savings have only a one time impact

 …it seems to me that the need is indeed compelling. Whatever views one might have of past School Boards, it seems to me that the current one has to operate in a very different economic environment and that their actions should reflect that.

Views from the High School, Part I: Conestoga Students Support Their Teachers During TESD Budget Discussion

Members of Conestoga High School editorial staff weighed in on the District’s 2010-11 budget deficit in a recent issue of The Spoke. There were a couple of editorials that I found of particular interest and will post them separately.  This Op/Ed piece indicates student support for their teachers; attributing their educational successes to the faculty.  Based on past TESD budget and teacher union commentary on this site, views from our high school students present another interesting angle.  Do you think that the views of these specific students are representative of the student body?  Do you think that the teachers influence the students; in hopes that the students will help influence their parents (the taxpayers)?  Comments, anyone?

With early dismissal of school today, maybe local teachers and students can offer their opinions.  I will provide Views from the High School, Part II in a separate post.

Printed originally on p. 7 of The Spoke’s Feb. 23, 2010 edition.

Unsigned editorials represent the views of The Spoke editorial board, and not necessarily those of the administration, student body, community or advertisers.

      Defining our education

The recent economic downturn is affecting all corners of the country, causing numerous financial problems and leading to the loss of millions of dollars and jobs, both at the national and the local level.

As evidenced by the Tredyffrin/Easttown School District’s budget proposal for next year, the school board is also experiencing economic pressures as it tries to overcome a $9.25 million deficit without sacrificing the quality of the district’s educational program.

Nevertheless, to the consternation of many students and parents, the school board is making an age-old mistake. When tackling budget issues, all businesses naturally target areas with large expenditures. For schools, this leads to the reduction of some very important individuals: the teachers.

In a draft of budget reduction proposals discussed on Feb. 8, the school board’s finance committee acknowledged that “change is particularly challenging in schools where success has become the norm.” While this may be true, the board must also recognize that any success of the students is directly attributable to the high caliber teaching staff we have in the district today.

Still, several proposals in the budget draft will undoubtedly affect some of the most commendable employees in the field. Part of the proposal states that 19 teachers, including those who plan to retire or resign, will no longer be part of the school district next year. An increase in the number of instructional periods for Conestoga teachers is also recommended in the draft.

If this latter suggestion becomes a mandate, high school teachers will have to bear the brunt of extra pressure. An integral part of the school community, teachers serve as accomplished role models for students both inside and outside the classroom. Always available during school, teachers nurture individual student growth and help create learned citizens of the world—all this in a day’s work.

In fairness to the board, we in T/E are facing trying times, and difficult decisions must be made. However, teachers are invaluable resources that cannot be removed simply to alleviate economic woes. They are the most important and influential members of the school community and sacrificing them—though it may offer temporary economic relief—will only have a detrimental effect on the overall growth of students.

The suggestions made in the budget draft are not set in stone, though, and any ideas presented in the proposal can be changed. We, the Conestoga student body, need to step up. If you don’t like certain aspects of the proposal, then make your voice heard. Instead of showing your displeasure through Facebook posts, go to a school board meeting and directly address those who are involved in the decision-making process. It is, after all, your education. It’s your future.

T/E School Board Meeting, 2/22/10 . . . Meeting Highlights from Malvern Resident Ray Clarke

In addition to the Board of Supervisors Meeting last night, at the same time there was a T/E School Board Meeting at Conestoga HS.  As usual, my friend Ray Clarke kindly attended the School Board meeting and took notes.  Here are the notes . . . thank you Ray!

Selected highlights from the School Board meeting, chaired last night with a light hand by Jim Bruce:

1.  The extension of Dr Waters’ contract for a further 5 years.  The last item on the Agenda, but given ample discussion.  Strong support from the Board, led by Kevin Mahoney, and from community members.  There is no salary increase for the full term, and it was emphasized that there are no “side deals” and that effort was made to ensure that this is a “clean contract”  It will be available on the district web site soon.

This support seems to me well-deserved (taking the administration’s response ot the budget deficit elimination challenge as one recent example) and it says much about the Board’s commitment to transparency (a word much used last night) and to fiscal restraint, with its benchmark for future contracts of all types.  One downside to leadership longevity (Dr Waters will have been the Superintendent for 16 years in 2015) is that you might miss the fresh ideas that an outsider can bring.  That perspective can come in part from the Board, and it’s encouraging that we continue to see probing questions from Rich Brake. 

2.  Bill DeHaven reminded us of the times he climbed the fence at Teamer Field to play football, but more significantly spoke of the Citizen Soldier project that has compiled into a book the names of all T/E residents who served in all the nation’s conflicts up to World War II.  The book, available at the CHS and township libraries, is dedicated to its prime mover and my good friend and open space visionary, the late Neil McAloon.

3.  Nothing new on the budget, except that – per the Finance Committee discussion – the strategies are being regrouped to link related items, and this list will be available on the web site likely late this week.  I had hoped we might hear about substantive discussions of the TEEA offers alluded to at the Finance Committee meeting, but it seems there is nothing to report.  Kevin Mahoney emphasized that the Board is taking a 3-5 year perspective on the finances – clearly critical when one element of the near term solution is to use the fund balance, which can only go so far.  The Board has recently met with local legislators about the PSERS problem

4.  Three items related to our district going digital:  a) On line course options will be increased for 2010/11 to 25 courses not currently offered at CHS; b) acknowledgment of the role of blogs like Community Matters as well as all community input (a long list of correspondence to the Board); and c) next year CHS will submit its part of the college application materials electronically – should be a big time-saver, quality improvement and stress-reducer!

Conestoga High School Grad Offers Personal Experience of Seniority in T/E School District

The following comment was received from a Conestoga High School graduate in response to ‘Last In, First Out’ discussion on teacher seniority.  Some people would automatically assume that the more experienced teachers make the ‘better’ teachers.  I don’t know if his/her personal experience is typical . . . but it certainly offers another viewpoint. Comments?

CHS Grad, on February 22, 2010 at 6:53 AM

Seniority is also what allowed my history teachers throughout my years at Conestoga to be completely inept teachers, and the reason why I didn’t learn one thing about history during my years at high school. Not sure if I should name names here, but specifically I had a history teacher in 11th grade that literally did not do anything but show film strips, to which no one ever paid attention. The class was a joke, and the teacher didn’t care at all. He would have us grade each other’s tests, and then we would line up and enter our own grades into his grade book. Of course everyone gave themselves passing grades. Maybe he was a great teacher when he was younger, he seemed like a nice guy and everything, but he was milking the system that had absolutely no accountability.

Another teacher I had at Valley Forge would literally fall asleep in the middle of class in the middle of his sentences. I don’t think he even really graded our tests because people would just write nonsense in their fill in the blank tests and most of the time it would be graded as correct.

In my view, seniority represents a division between generations, where older workers hold onto their positions with a death-grip as they begin to slow down, milking the system for all its worth. All the while, young, motivated teachers are left out on the sidelines. THAT is the foundation of unions in this country.

T/E School Board Meeting Tomorrow – Agenda Posted

In addition to the Board of Supervisors Meeting on Monday evening, there is a Tredyffrin Easttown School Board Meeting; 7:30 PM at Conestoga HS.  Here is the agenda for TESD meeting.

Included in the agenda materials is the Treasurer’s Report as of November 30, 2009 which was interesting to review, particularly in light of the 2010-11 budget discussions.  The last section of the agenda materials included ‘Recommended Action’ that the following policies and regulations be adopted by the School Board Directors. I found some of these policy updates interesting to read. In some cases it had been several years since revisions were required (example, as electronic device usage increases, updated school policy is required)  I appreciate that the school board gave us the old version and shows up the redlined updated revision. 

– Policy 1310: Visitors to School District Buildings and Classrooms
– Policy 1310: Classroom Visits by Community Members, REPEAL
– Policy 5228: Awarding of Diplomas to Eligible Veterans
– Policy 5400: Students’ Freedom of Expression
– Policy 5414: Electronic Devises: Use by Students
– Policy 5420: Unlawful Harassment by and of Students
– Policy 5422: Student Accidents and Injuries – Treatment and Reporting
– Policy 9310: Regular Monthly Meetings
– Policy 9312: Parliamentary Procedure
– Regulation 9331: Review of School Board Policies 

We should review where we are with the TESD 2010-11 budget gap.  The projected gap between revenues and expenditures is estimated at $9.2 million.  The gap was a result of loss of revenues and increase of expenditures.  At the January 25, 2010 regular school board meeting, school board members voted that any property tax increase would be at or below 2.9%, the statewide index.  To close the budget gap, there was proposed strategies presented at the February 8 Finance Committee meeting.  The School Board and administration continue to evaluate each proposed budget strategy.  The following 1-11 strategies were reviewed in detail at the February 8 meeting:

– Restructure the 7th and 8th grade program delivery
– Eliminate the Foreign Language in the Elementary School (FLES)
– Contribution from food/nutrition service fund to general fund
– Restructure middle school special area classes
– Reduce number of regular education aides/paraprofessionals
– Eliminate all CHS classes with fewer than 15 students
– Eliminate Supervisor of Special Education position
– Education Services Center disposition
– Outsource print shop
– Reduce number of Extra Duty Responsibility positions and club sports contribution
– Reduce 2010-11 budget requests to 2008-09 levels

At the March 8 Finance Committee meeting (7:30 PM Conestoga HS) and March 15 Budget Workshop meeting there will be continued discussions on the remaining strategies to reduce the 2010-11 budget gap.  The School Board has not made any final decisions regarding the implementation of the strategies.  It is my understanding that the School Board and administration will continue to work towards balancing the budget between now and the June 14, 2010 School Board Meeting.

One of the Community Matters readers posted an article from the New York Times a couple of days ago about teacher seniority and working to change the system for teacher layoffs; I’ll work to get that article up for discussion shortly.

Governor Rendell’s Proposed Budget Includes $354 Million in Increased School Funding

Governor Ed Rendell released his 2010-11 budget proposal yesterday. His budget proposes over $11 billion of taxpayer funding for educational services, which includes an increase of $354 million for school funding. Several reasons were cited for the funding increase including advances in achievement scores. In Governor Rendell’s proposed budget, education support services would receive $31.8 million in funding; basic education spending would receive $9.5 billion, for students in pre-kindergarten through 12th grade; and $1.8 billion for higher education with nearly $424 million of that allotted for financial assistance for students. State-aided private schools – including Drexel University and the University of the Arts in Philadelphia – would lose all their funding under the proposal. The exception is the University of Pennsylvania’s veterinary school.

Pennsylvania Secretary of Education Gerald Zahorchak offered that Pennsylvania was leading the nation in achievement improvements. Mr. Zaharchak emphasized a focus on increasing enrollment at a pre-kindergarten level. He feels that that there is an adequacy gap between where students should be performing and where they are currently performing which needs to be corrected. Mr. Zaharchak is suggesting that the gap would need to be filled by taxpayer funded state-subsidies. Accordingly, more than 300 Pennsylvania school districts would require more than $2,000 of taxpayer funding per student from the state to close this gap.

The pressures faced by school districts will result in local property tax hikes unless the state continues its commitment to close the adequacy gap, the Governor said. “On average, it would take a 40-percent increase in local property taxes to generate the same investment as the state will contribute over the course of our multi-year funding formula,” the Governor said. “When the state pays its fair share, school districts can keep property tax increases to a bare minimum.”

Here is Pennsylvania Department of Education 2010-11 Budget if you would like to read the details.

In case you are interested, here is Governor Rendell’s Executive Budget 2010-11 if you would like to see the entire proposed budget.

Will Governor Rendell’s proposed state budget have an impact on TESD’s 2010-11 budget?  Comments Anyone?