The 2009 – 2010 proposed school budget was approved by the South Brunswick Board of Education at a special Public Budget Hearing conducted during the March 30 meeting. On April 21, the annual school election will provide our community members with an opportunity to vote on this financial plan.
So that our residents can cast the most knowledgeable vote, I will attempt to provide an overview of our budget. Keep in mind that this budget was designed through an intensive process that sought to balance the interests of education and the interests of taxpayers in containing costs.
The total proposed budget is in the amount of $139,383,922. Voters previously approved the Debt Service (expansion and renovations of our facilities) portion of this budget that now totals $9,916,340. On Election Day, we are requesting that you vote on the local share of the General Fund budget in the amount of $96,009,320. It is this amount, when coupled with State aid, our local year-end fund balance (we are forced to deficit fund the 2009 – 2010 budget with $3.95 million to reduce the need for a tax increase) and a small amount of miscellaneous revenue that makes up the total proposed Operating Budget of $126,972,109. (The Operating Budget does not include Debt Service and Federal Program funds which, when added together, make up the Total Budget.) No New Taxes will be needed to support this proposed budget.
I am often asked about the funding sources that provide dollars for our budget. To assist in the response, Chart #1 provides an illustration of the revenue sources.
As you can see from this illustration, local sources (Local Tax Levy and Other Local Sources) provide approximately 79% of the dollars needed to fund the budget. The good news is that, on a percentage basis, the local share of the budget has declined for the two previous budget years and will decline again in this proposed budget. The reason for this decline is the State aid share of the budget. State aid has increased for the second consecutive year.
While the State aid contribution to our schools is less than 20% of our total budget, increases in this area reduce the need for the local contribution to grow. Chart #2 graphically illustrates the relationship between State and local aid. While the relationship isn’t totally inverse, increases in State aid significantly reduce the need for local tax increases.
So that you might better understand this financial plan, let me share the most significant factor that shapes this budget. South Brunswick School District projects an increase of 87 additional students for the 2009 – 2010 school year. This will bring our K-12 enrollment to 9,097. This increase is modest indeed when compared to the earlier years of this decade. A quick review of Chart #3 illustrates enrollment history from 1995 when the K-12 total enrollment was 5,440 to the projected 2009 – 2010 total. This period of growth provided the School District with a 67% increase in student enrollment.
As you well know, enrollment growth touches almost every other budget category. Additional students over the years have driven our building expansion needs, increased our maintenance and operations costs, required additional staff, expanded program offerings to meet a wider continuum of needs and increased transportation costs. While our proposed budget supports these costs, the small student enrollment growth and a moratorium on new instructional initiatives (second year of not adding new programs) are central factors in limiting budget growth and not needing an increase in taxes.
The process that was utilized to shape this proposed budget involved analyzing every area of current spending. This review process allows the administration to ask the questions, “Why do we do this?” and “Just because we have done this before, do we still need to?” This analysis has revealed, over the years, some time-honored practices that were no longer necessary. In response to the question, “Are there more cost-effective and cost-efficient ways to do what must be done?” we have identified at least 14 shared services, purchasing consortiums (insurance, energy, technology, supplies, etc.), joint efforts (transportation) and re-financings (1997 School Bonds).
To be a bit more specific, we are presently engaged in an Energy Audit that has costs of about $196,000. We successfully secured a grant that will pay almost all of the audit costs. We fully expect the audit results will yield significant energy cost savings. During the past three budget years, we have saved over $500,000 in the area of insurance costs because of our consortia memberships. Likewise, transportation efficiencies have resulted in savings of $355,000. This is not a mutually exclusive list but offered rather as an example of District efforts to be cost-effective.
In any budget construction process, and school districts are no exception, “fixed costs” must be recognized and analyzed. These are the costs associated with such things as heat, light, water, air-conditioning, gasoline, natural gas, fuel oil, diesel fuel, transportation vehicles, pension costs, salaries, benefits, insurance costs, legal fees, etc. Again, this is not an exhaustive list but meant to provide a clear indication of the type of costs that represent approximately 90% of our Operating Budget.
After our students, the District’s most valued and important resource is our staff. Quite frankly, schools are labor-intense organizations that develop reputations based upon the competence and caring nature of the staff. The District’s reputation for excellence is a direct reflection of the commitment and quality of the staff. With all things of quality, there are attendant costs. Because we are involved in the collective bargaining process with each of our eight unions, we do not have cost data to share at this time.
Continuing with some of the major factors that shape our proposed budget, we anticipate increasing energy costs to require an additional $210,000 over present funding levels. Pension costs will require an additional $150,000 and Transportation costs will increase by $418,000. Mandated bus replacement costs represent about 50% of the Transportation increase. Facility capital improvement needs such as roof replacement sections, HVAC unit replacements, energy-efficient window replacements, etc. will cost approximately $1.8 million. We will be utilizing almost $600,000 from our Capital Reserve Fund to reduce the budgetary cost of these projects to $1.2 million.
Obviously, the Expense side of this proposed budget would require a tax increase unless additional revenues and/or budget reductions were realized. This budget reflects both. As previously mentioned, State aid has increased. In a year in which we anticipated no increase, this additional aid was significant in developing a budget that does not require a tax increase. This increase alone was still not enough to forestall a tax increase. Another action was unfortunately necessary.
This proposed budget reduces the personnel portion by 25 positions. Coupled with the position reductions of the previous four years, we have now eliminated 66 positions since 2004. Because we are a labor-intense organization and the overwhelming cost of our budget is associated with personnel costs, the only significant way to realize slower budget growth is to reduce positions.
As part of our coordinated budget process with the State of New Jersey, we met with the Executive County Superintendent in January. During that meeting, which provided a forum to analyze the current budget, we were directed to reduce personnel labeled as administrative, paraprofessional and operations/maintenance. Based upon that directive, we eliminated/consolidated 13 positions coded as “administrative” (Public Information Officer, Assistant Principals at three levels, Assistant Athletic Director, South Brunswick High School Supervisor and secretarial support at all levels.) In addition, we eliminated paraprofessional positions, custodial positions and a part-time social worker position. A reorganization of our Basic Skills program will eliminate two positions.
Of the 25 positions, 14 were eliminated through attrition. The remainder of the personnel were informed recently that their position was being eliminated. In every instance, a great amount of thought and discussion was involved prior to making the decision. The reductions were made apart from the classroom and the instructional program in every instance. These cuts will not impact class size or instructional delivery.
All three areas of administrative costs are reduced in this financial plan as a result of the position reductions. The Debt Service reduction is a continuation of the previously mentioned refinancing. We are in the second year of a three-year savings that has reduced our Debt payment (think mortgage) by over $1million per year. The 2007 – 2008 cost was slightly more than $11 million.
South Brunswick has long enjoyed a reputation for educational excellence. This column will not attempt to recount the abundant evidence of this fact. A visit to our Web site, attendance at a Board of Education meeting or reading other articles and issues of this publication will provide compelling examples of student successes. Ours is truly a high performing District. “But at what cost?”
This Chart illustrates quite clearly that our School District is a low cost, high performance organization. At a time when per pupil costs in New Jersey range from a low of $9,100 to a high of over $18,000, South Brunswick is $1,656 below the state average. When viewed in consultation with our performance indicators (State testing, SAT scores, National Merit qualifiers, Bloustein Scholars and the many other student recognitions), we have much to celebrate.
I hope that every reader will view this proposed budget as an investment in our students, their future, our future and the reputation and value of our community. I also hope that this information will assist your understanding of this proposed budget. Should you have questions, please visit our Web site, www.sbschools.org, or call me at (732)297-7800, ext. 5104. As always, your support is greatly appreciated.
Gary P. McCartney