Prince George school board looks for ways to trim budget
By James Peacemaker, Jr., Managing Editor
Mar 8, 2013, 12:09
PRINCE GEORGE — Facing a potential $734,000 shortfall, the Prince George School Board continued to consider ways to trim its budget Tuesday night.
The board and other school officials discussed ways to reduce insurance costs and whether or not to offer incentives to get older, higher-paid employees to retire.
In his spending plan for the 2013-2014 fiscal year, Superintendent Bobby Browder has proposed spending $57,651,096, a 0.17 percent increase over the previous year’s $57,552,547.
But Browder has warned of several challenges for the coming year.
Browder said federal funding will be reduced by $464,000. Due to the sequestration, the county would see less Title I and special education funding as well as Impact Aid, which is money that goes to localities that cannot collect taxes on federal property such as Fort Lee.
County schools would also not get nearly $1.3 million in one-time funding from the county like they did the previous year. The schools also face higher insurance premiums, a 1.5 percent increase in contributions to the Virginia Retirement System and an unfunded mandate to add economics and personal finance classes.
But there is no guarantee that a tax increase would get approval from the Board of Supervisors, so school officials are looking for ways to cut an already-tight budget.
Also complicating things is a plan recently approved by the General Assembly to boost employee salaries. The state would offer the county $464,000 to partially cover 2.4 percent raises for basic teachers and support staff, but the superintendent wants another $500,000 to bring the step raise up to 2.5 percent and give it to all employees.
The schools would have to give the raise by Jan. 1 or they would miss out on the state funding.
Browder is also calling for an additional 1.5 percent raise for all employees for a cost of $277,000. School employees haven’t had a raise in years. Without the raises, the budget would still be short $180,000.
Browder’s spending plan would also cut 19 positions while adding two special needs positions to save just over $900,000.
Another way to save money the School Board members discussed Tuesday night was to look for cheaper insurance alternatives.
School Board member Lewis E. Stevenson said rates have gone up 14 percent in a year, and said the increases were not sustainable.
Stevenson wanted to get more information on health savings accounts and wanted Cigna, the current provider, to come to the board with ideas on how to reduce costs. He said officials need to have vision beyond one year in the future and that any money saved could go to instruction.
Betsy Drewry, director of finance for Prince George Public Schools, said the school system looked at 13 different options with Cigna, and the company was by far the cheapest when bids were sought previously. She also said action needed to be taken quickly if the school system wanted to seek bids for a new insurance company before the contract needed to be renewed. She said the schools share the plan with the county, so they need to be involved in the discussion too.
The School Board is also considering paying employees to retire. Eligible employees must have worked for in the school system for more than 10 years and be eligible for full benefits from the Virginia Retirement System.
Drewry proposed offering $15,000 to employees who would retire, but some members of the School Board wanted to base the incentives on employees’ salaries or number of years worked. Some suggested that high-paid administrators could be paid at a lower rate.
Drewry said the number of employees would have to be capped depending on the type of job they performed. For example, she the school system couldn’t afford to lose bus drivers.
School Board member Roger E. Franklin Jr. said he was concerned that any payment could set a bad precedent and become an entitlement that employees come to expect, possibly leading people to wait to retire until the payouts were offered again. He said he would rather see the money used to reward employees who are staying in the school system.
Other School Board members noted that money saved by not filling the positions or by hiring people with less experience would result in more money available for instruction.
School Board Chairman Robert E. Cox said the retirement incentives are a much more attractive plan than laying people off.
Drewry said the incentives could be paid for with $375,000 from year-end savings, but it could conflict with the ability to buy new school buses.
The School Board will consider the changes further at its regular meeting Monday.