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Chambersburg looking at $2 million budget deficit

January 12, 2011|By C.J. LOVELACE | cj.lovelace@herald-mail.com

While teacher contract talks remain a hot button issue in the Chambersburg Area School District, a projected multimillion-dollar deficit won't offer administrators any relief as they move forward with planning next year's district budget.

Steve Dart, the district's business manager, presented the Chambersburg Area School Board with an overview of the budget process at Wednesday evening's board meeting. He estimated the district will be looking at a $2 million gap that will need to be filled without complete funding data from the state level.

"It's a continuation of what we've been facing for three years now and it's just not getting any easier," Board President Norm Blowers said after the meeting.

"Initially, the first year of the recession, people said 'oh, a year or two from now, it's going to be picking up again,' and we hoped it would, but we're looking for the light at the end of the tunnel now," he said.

With federal stimulus money drying up on June 30, the tunnel hasn't yet begun to brighten.

The district will lose $773,000 that it used to balance the current year's budget once stimulus funds are gone, but Dart said the district has prepared for the loss of those funds by eliminating some nonessential spending.

However, the state, which is facing a potential deficit around $4 billion of its own, does not appear to have the resources available to cover those dried-up stimulus funds and will be reverting the district's allocations to 2009 standards, which will be the cause of the $2 million reduction in state funding, Dart said.

There was no discussion from the board or any visitors about the current stalemate between the district and its teachers union over a new collective bargaining agreement.

Increases in payroll, health care premiums and pension contributions leave the district with no choice but to raise taxes to balance its budget, he said.

The district is allowed by law to increase real estate taxes by 1.7 percent in the next budget, but with certain exceptions, Dart recommends they look to raise taxes by 3.5 percent.

Exact clarification of those exceptions was not available after Wednesday's meeting due to a closed-door executive session afterward.

Blowers said the board will have to weigh the idea of reducing staff positions against the exceptions, or begin looking for other ways to cut expenses.

"That's our dilemma," said Blowers. "And we don't know what the state budget is and we have to pass ours; that's still a black hole. That's very difficult."

The current real estate tax rate of 89.621 mills would increase to 92.757 if the board goes with Dart's recommendation. In 2009-2010, the board approved an increase of 4.9 percent.

A federal program known as "Ed Jobs," short for Education Jobs Fund, was passed in August and it should help soften the blow of the lost stimulus dollars, Dart said.

Under the program, the state must allocate $387 million in Ed Jobs funding to districts based on an undetermined formula. Using a method that closely resembles the federal stimulus allocation criteria, Dart estimates it will provide about $1.3 million next year, which brings the projected deficit to $2,084,365. Without the Ed Jobs program, the district would be looking at a $3.4 million hole, Dart said.

Gov.-Elect Tom Corbett will officially take office on Jan. 18 and begin tackling the state's shortfall, but is not due to release a preliminary budget until March, leaving almost three months for the district to plan on incomplete data, Dart said.

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