MSD Concerned Over Proposed State Cuts

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By Terry Rogers

On Monday, April 10, Sara Croce, Chief Financial Officer of Milford School District, presented the potential impact of proprosed state budget cuts released by Governor John Carney in late March to the Board of Education. Ms. Croce said that the district expected some cuts but were not expecting the drastic cuts that the proposed budget outlines.

“Many of the cuts will have an impact on our staff,” Ms. Croce explained. “Things like the elimination of the double state share for employee healthcare, increased healthcare costs and an increase in employee pension contribution from 9.58 percent to 10.42 percent. In addition, the Governor has proposed an increase in state income tax. He is also proposing that the state lower the Senior Property Tax Credit from $500 to $400 and require seniors to have lived in the state for ten years rather than three to qualify for the credit.”

In addition to the added costs to district employees, Ms. Croce explained that the cuts to education were far more drastic than anticipated. Milford School District could lose $678,458 in Education Sustainment funding. The budget also proposes changing the current split for transportation costs from 90/10 to 85/15, adding $138,605 to the district budget. A match tax may also be authorized for districts to recover transportation costs. A cut to discretionary spending could cost the district an additional $419,412 with no proposed match tax for those lost funds, and a cut t Division II Energy Units could add another $13,149 to the budget.

“We can implement the match taxes without going to referendum,” Ms. Croce said. “The match taxes could recover the transportation and sustainment funding, but we will still need to recover the additional energy funds and discretionary fund cuts. Without the match taxes, which may not be approved at all, we will need to cut $1,249,625 from the budget. This is a three and a half percent cut to our district alone.” Ms. Croce explained that the district, in anticipation of budget cuts, had been able to reduce spending by $710,139.

Ms. Croce explained that the proposed budget led to many concerns at the district level. She said that the timing of the passage of the budget could be problematic. Since Governor Carney was just starting his first term, the proposed budget was released later than usual. This meant that the budget would not become a bill until early June and may not be adopted until June 30. This makes it difficult for the district to address staffing concerns.

“One way we could trim the budget is to not replace staff who are leaving the district due to natural attrition, such as retirement,” Ms. Croce said. “However, we need to see the final budget before we make those decisions. We are already looking at next year’s staffing, but are unsure if we can actually hire the people we need.” Ms. Croce explained that property discrepancies also create a challenge when cuts are proposed.

She explained that districts like Cape Henlopen and Indian River who have a large number of homes with higher property values are better able to absorb funding cuts than smaller districts like Milford. She said that districts in the western part of the state are in even worse financial condition as their property values are signiificantly lower.

Board Member Hunter Emory pointed out that rising costs in tuition were of major concern on top of the proposed cuts “It does not seem fair that other districts with special needs schools can come to us and ask for additional funding retroactively,” Mr. Emory said. “They are acting like robber barons. They only need approval for additional funds if the costs rise above ten percent, but even if they do rise, DOE simply rubber stamps the request and we are left holding the bill.” Ms. Croce said that the policy was state law and that the other schools were simply doing what Delaware code allowed them to do. School Board President Renate Wiley pointed out that tuition costs rose between 10 and 32 percent at various schools over the past year.

Despite the cuts to portions of the district budget, Ms. Croce still hopes to lower property taxes in other areas for the upcoming year. Ms. Wiley explained that although the district may decrease taxes for tuition, debt service and other areas, adding match taxes may reduce the amount taxes may be lowered.

“We are aware that we are a state agency,” Superintendent Kevin Dickerson said. “All state agencies are facing cuts this year, not just education. We are aware we must do our part to help balance the state budget and we will do our best. We need input from the public and the board as to where we can make cuts that will be fair to our students, our staff and our taxpayers.”

The proposed district budget will be discussed at a special meeting of the Milford Board of Education on May 1, 2017.

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