Faced with a structural deficit that threatens to eat its savings by 2020, the Harrisburg School District has proposed cutting back its kindergarten program to half-days indefinitely starting next year.
That’s even if the board authorizes maximum tax hikes over the same time period.
Almost 50 people heard budget projections at a public meeting tonight, where tempers ran high among board members, administrators and Harrisburg residents. Many residents demanded to know why the district’s finances had deteriorated so rapidly, given that administrators had been able to add to the fund balance as recently as 2016, when it reached almost $30 million.
Interim CFO Jim Snell explained that the district’s financial recovery plan had merely deferred difficult decision-making since it was implemented in 2013. The program is set to expire in June, the same month that the school board is required to adopt a final budget for the 2018-19 school year.
Snell explained that the district is facing healthcare and pension costs that are “beyond what they ever imagined.” He cited charter school enrollments and a stagnant real estate tax base as revenue limitations.
The district has not levied a tax hike since 2012, but, this year, administrators are proposing an increase of 1.0008 mills, or 3.6 percent of its current 27.8 millage rate – the maximum rate allowed under the Act 1 Index.
With a median home value of $42,800, the tax hike will cost the average city homeowner an additional $43 a year, said district business manager Bilal Hasan.
Budget projections call for an annual 3.6-percent tax hike every year through 2021.
Even with the additional tax revenue, the district will not be able to pay its employee salaries and benefits without cutting some of its programs.
Since it gutted its staff and academic offerings under its financial recovery plan, the district has very few non-mandatory offerings left to eliminate, Snell said. But Pennsylvania does not require schools to offer full-day kindergarten, making it one of the few areas where the district can cut back.
Reducing kindergarten to half-days would net the district $1.2 million in annual savings and eliminate 14 teaching positions, Hasan said.
Hasan said that no other combination of cost-cutting measures would generate the same amount of savings. Eliminating the entire athletic program would only save $700,000, and Snell said that cutting all other extra-curricular programs would not make up the difference.
Many residents pleaded with the school board and administration to preserve full-day kindergarten.
“The only way we can increase our tax base is by offering the services you want to cut,” said Kia Hansard, a district resident and parent. “How will we get people to move into the city, buy homes and stay if we cut kindergarten?”
Jodi Barksdale, president of the Harrisburg Education Association, said that reducing early learning opportunities put students at a disadvantage for the rest of their educational careers.
“Kindergarten through fourth grade is the foundation of education,” Barksdale said. “If we do not invest all of our efforts into the foundation of our children, we are going to crumble and fall.”
Board members said they would do what they could to keep the kindergarten program intact, but the funding gap before them is significant. Board President Judd Pittman said that district would approach private sources of wealth, such as the Foundation for Enhancing Communities, to appeal for assistance.
Even when combined with maximum tax hikes for the next five years, the proposed cuts are not enough to prevent the district from depleting its fund balance by 2020.
The fund balance stood at $21 million going into the 2017-18 school year. But the district’s expenditures have consistently outpaced its revenues, requiring a yearly drawdown of the general fund to bridge the gap.
Budget discussions will continue at the board’s monthly budget and finance meetings at 5:30 pm on Monday, May 7 and Monday, May 14. The board meets in full on May 21, one month before a final budget is due.