We are writing to advise you that the Commonwealth's financial position has changed significantly since the Governor announced his FY 2010-2011 budget proposal on February 9. Therfore, we urge you to be very cautious when preparing your FY 2010-2011 budget.
They are sounding the alarm. They go on to describe some of the details:
Specifically, the Commonwealth's estimated revenue shortfall for FY 2009-2010 has grown from $450 million to an estimated $1 billion. The Federal Department of Transportation ruled earlier this month against the state's plan to toll I-80, which resulted in a $450 million annual loss to the Motor License Fund for important road and bridge repair projects. Commonwealth Court recently ruled $800 million used in the current year budget must be returned to the MCARE Fund an Healthcare Provider Retention Account. In addition, there is no guarantee the Commonwealth will receive nearly $850 million in enhanced Federal matching funds to support welfare programs, which was assumed in the Governor's budget.
For the reason mentioned above, please understand there is no guaranteed level of funding for school districts or any other entity in the Commonwealth in the 2010-2011 budget.
As I said in my post linked above, a freeze at last year's level of funding would result in a $120,000 hit to our budget. The larger fear is that this year starts the PSERS increases for every school district across the state. The Commonwealth is on the hook for 50% of all of the increases for every school district. It will be no small sum of money.
For a more thorough analysis on the problem, please see this article.
From that article is a terrific quote:
The first thing [school boards] should do,” said Mr. Arneson, “is to look at ways to reduce costs; not to see increases in taxes as the first step, but to reduce cost as the first step. It’s something that will probably be different in each of the 500 school districts because they all have different programs, different salaries, materials, space, and maintenance. It’s unique to each school district.” Mr. Allwein said school districts are also cost-cutting through natural attrition, by not hiring when staff and faculty leave.
Don't forget that our 2010-2011 budget vote is tonight. I expect that this Board will approve the motion to increase millage rates by 10.5%.
Thanks for reading.
James
