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$6.4 million deficit is MASD’s ‘worst-case scenario,’ district's top financial official says

By Laura Hayes

laurahayes@pressandjournal.com

717-944-4628
Posted 1/15/20

A projected $6.4 million deficit next school year is a “worst-case scenario,” Middletown Area School District Chief Financial Officer …

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$6.4 million deficit is MASD’s ‘worst-case scenario,’ district's top financial official says

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A projected $6.4 million deficit next school year is a “worst-case scenario,” Middletown Area School District Chief Financial Officer David Franklin told the Press & Journal.

The projected deficit was discussed at the school board’s Dec. 17 meeting, but Franklin said there likely will be significant changes to the budget before it is approved.

Included in these additional expenditures are 18 new positions, although some or all of them might not make it to the final budget.

“The deficit is based upon additional expenditures in the budget that are not balanced by additional revenue. It is too early in the year to project additional revenue as the state budget has not been proposed and the district does not have information on any assessed value increases for [2020-2021],” Franklin said.

Franklin said he hoped additional revenue would lessen the deficit.

In December, the school board passed a resolution that the district wouldn’t raise real estate taxes beyond its state-approved index of 3.69 percent for next year.

“Since the board adopted the resolution not to increase the budget above the index, there will be a lot of administrative work on the budget before another draft of the budget is presented in May,” Franklin said.

Expenditures for the 2020-2021 school year are estimated to be $55,170,887, and revenue is projected to be $48,801,222.

One of the positions that Franklin said might not ultimately make it into the final draft of the budget is an assistant elementary principal, who would help deal with student issues and address an increase in enrollment at the elementary level.

Other staff additions include:

• Three full-time teachers at Middletown Area Middle School. Currently the district is studying changes to MAMS’ schedule. What these new positions would be hasn’t been determined, and Franklin added that the district isn’t in the final stages of determining schedule changes. It’s harder to add items to the budget later, he said.

• A seventh-grade MATES (short for Middletown Area Therapeutic Elementary Support) program staff member. The program is currently through sixth grade.

• Three special education positions at MAMS.

• One special education position at the elementary level.

• One additional elementary classroom teacher as a large cohort of students move through the system.

• Two psychology interns. According to Franklin, an additional school psychologist has been budgeted for the past two years, but the district hasn’t been able to fill.

• Six instructional aides.

• A MAMS secretary was hired this school year, which will be budgeted for in 2020-2021.

• A computer technician position will be taken away and filled through a contract.

In total, Franklin anticipates a $1.3 million increase in salaries for a total of $20,464,189 compared to $19,191,108 that was budgeted for 2019-2020.

Additionally, benefits are projected to increase by about $1.5 million to a total of $14,041,287, which Franklin said is primarily due to medical insurance and retirement contributions.

“We have not received a renewal proposal for health insurance, so we hope the amount allowed is a worst-case scenario,” he said.

MASD is also projecting an increase in funds going toward equipment — from $633,423 budgeted for in 2019-2020 to about $2.3 million in 2020-2021. Franklin said anything that was requested was included in the draft budget.

“Some of the equipment included had to do with some requests that were made that I think will either need to be removed, postponed or addressed in a different manner,” Franklin said.

For example, one of the requests included renovations to the press box and field house at War Memorial Field, which Franklin said is a project the school board has been examining. A project of that magnitude, he said, typically wouldn’t be funded with reoccurring funds like those in the general fund.

Also included in the expenses is a contract with Effective Schools Solutions, which Franklin said the school board had yet to be presented with.

According to Effective Schools Solutions’ website, it “partners with school districts to help them implement mental health programs that improve care, strengthen outcomes, and maintain students in-district.”

Franklin said it would provide services to students and help staff deal with the mental health issues of students.