The Bethlehem Area School District’s latest budget projections show the district is still facing an $8 million deficit. With a month to go before the proposed final budget is due, district staff are aiming to further cut expenses while avoiding layoffs and minimizing a planned tax hike.
Salaries and benefits make up more than 60% of the district’s budget, and Superintendent Jack Silva said he remains optimistic that the district will lose enough staff through attrition to avoid layoffs.
During Monday’s finance committee meeting, Interim Chief HR Officer Russell Giordano told the school board that he believes a majority of teachers who are planning to retire have already notified the district and that number is currently below the district’s typical number of retirements, which he estimated at 30 annually.
Chief Financial Officer Harry Aristakesian reported there are ongoing discussions about how to reduce teaching and support staff positions while maintaining the district’s class size and support-staff-to-student ratios. This “right sizing” process aims to reduce the need to fill vacant positions by instead adjusting existing staff assignments to fit classroom enrollment numbers.
There are also ongoing conversations about potential consolidation of district administrative positions, Aristakesian added.
Aristakesian anticipates drawing on the district’s unassigned fund balance to help close the deficit, but how much that drawdown will be remains undetermined.
The district’s budget calls for a 3.5% increase in the local property taxes that form the bulk of the district’s revenue. In this budget cycle, state law allows the district to raise those taxes up to 4.2%, but Aristakesian said he aims to minimize that.
Current economic conditions mean it is “not a good time to continue to push for that additional increase,” he said.
Aristakesian is currently budgeting for the district to receive half its promised adequacy funds — state money designed to make districts whole after a court ruling found Pennsylvania’s school funding system unconstitutionally shortchanged students in districts that were not adequately funded. He is also projecting a drop in federal funding streams.
“I’ll be the first one to admit my crystal ball’s a little foggy,” Aristakesian said, noting that state and federal allocations are not guaranteed.
Silva said Pennsylvania’s superintendent association is expecting state funding levels to remain largely steady from last year’s budget and does not anticipate a repeat of last year’s prolonged state budget impasse that delayed the release of funds to districts.
Aristakesian estimated the district suffered between $500,000 and $600,000 in lost interest due to that delay.