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May 11, 2016

Proposed General Fund Budget


May 11, 2016

May 11, 2016

May 2: Budget Enacted, Fiscal Code Enacted

50,000,000

Commonwealth Funding for CASD

May 11, 2016

04/19/2016 1110

39,647,374

40,000,000

Total State Funding


Five year average growth rate of 4.85%.
Ten year average growth rate of 3.52%.
33,046,059
31,934,276
30,882,663
30,000,000

32,802,996

37,013,756
35,376,055
33,346,432

31,536,497

32,989,334

32,050,379

29,038,503

30,721,393
29,359,332

30,267,803

30,843,181

30,393,034

31,182,531

31,591,812

Total State Funding less Retirement Subsidies


Five year average growth rate of 1.70%.
Ten year average growth rate of 1.94%.

27,738,831

20,000,000

Total State Funding for education increases each year


to "record" levels. However, most of the additional
funds in the last few years pay for increases in
retirement contributions for existing staff. Very little
is left for additional teachers or classroom needs.
10,000,000
6,658,040

Retirement Subsidies
Five year average growth rate of 35.76%.
Ten year average growth rate of 19.90%.
1,299,672

1,523,331

995,680

1,212,883

1,268,694

5,421,944
4,193,524
2,953,398
1,959,815

0
2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

May 11, 2016

2016-2017 Major Cost Growth Drivers


to retain the existing staff at CASD without new hires
CASD

2015-2016
Estimated

2016-2017
Anticipated

Change

Payroll

51,900,000

53,457,000

1,557,000

3.00%

Health Care

13,135,000

14,527,310

1,392,310

10.60%

Dental Care

706,000

727,180

21,180

3.00%

6,705,480

8,026,569

1,321,089

19.70%

Tuition Reimbursements

535,000

545,000

10,000

1.87%

Workmen's Compensation

359,000

373,000

14,000

3.90%

73,340,480

77,656,059

4,315,579

5.88%

Retirement (net cost; after subsidy)

Compensation

May 11, 2016

Payroll
Almost all employees will receive at least a
3.0% pay increase for 2016-2017.
With a projected total payroll of $51.9 million
in 2015-2016, an increase of almost $1.6
million is expected.

May 11, 2016

Health Care
After years of very slowly growing health care
costs, CASDs renewal for 2016-2017 is an
increase of 10.6%.
With projected costs of $13.1 million in 20152016, an increase of $1.4 million is expected.

May 11, 2016

Retirement
2016-2017 will be another fiscal year with a
large increase in the retirement contribution
rate. The underlying rate increase is 16.2%,
and pay raises drive the cost up further.
With projected net (the Commonwealth
subsides half of the total) costs of $6.7 million
in 2015-2016, an increase of $1.3 million is
expected.
7

1.94%
1.09%
1.15%

5.00%

0.00%
8.76%

10.43%

21.40%

25.84%

30.03%

32.04%
33.27%
34.20%
33.51%
33.51%
33.75%
33.84%
33.94%
34.18%
34.30%
32.10%
32.20%
32.31%
32.43%
32.58%
32.72%
32.88%
33.03%

2016-2017 PSERS rate,


certified 12/8/2015

18.12%

16.93%

35.00%

14.27%
12.46%

12.36%

11.06%
11.72%
10.60%

14.90%
14.24%
13.17%

19.31%
20.04%
19.90%
19.54%
19.27%
19.68%
19.16%

PSERS Contribution Rate History and Projections - December 2015

8.80%
7.28%
5.93%
4.55%
4.14%
4.00%
3.88%
3.75%
3.62%

6.46%
7.13%
4.76%
4.78%
5.64%
8.65%

3.77%
4.23%
4.69%

10.00%

6.04%
4.61%

15.00%

11.32%
11.92%
12.36%
13.70%
12.58%
12.34%
11.86%
10.46%
9.96%
9.22%
8.84%
9.32%
9.06%
9.26%
9.90%
9.90%
9.90%
9.90%
10.66%
10.66%
11.04%
11.70%
13.31%
13.31%
13.31%
13.31%
15.00%
15.00%
16.00%
17.06%

20.00%

1954-1955
1955-1956
1956-1957
1957-1958
1958-1959
1959-1960
1960-1961
1961-1962
1962-1963
1963-1964
1964-1965
1965-1966
1966-1967
1967-1968
1968-1969
1969-1970
1970-1971
1971-1972
1972-1973
1973-1974
1974-1975
1975-1976
1976-1977
1977-1978
1978-1979
1979-1980
1980-1981
1981-1982
1982-1983
1983-1984
1984-1985
1985-1986
1986-1987
1987-1988
1988-1989
1989-1990
1990-1991
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
2021-2022
2022-2023
2023-2024
2024-2025
2025-2026
2026-2027
2027-2028
2028-2029
2029-2030
2030-2031
2031-2032
2032-2033
2033-2034
2034-2035
2035-2036
2036-2037
2037-2038
2038-2039
2039-2040
2040-2041
2041-2042
2042-2043
2043-2044
2044-2045
2045-2046
2046-2047
2046-2047

40.00%
04/14/2016 1112

May 11, 2016

30.00%

25.00%

30,000,000

May 11, 2016

Retirement Expenses (note: Commonwealth subsidizes 50%)


04/22/2016 1514

25,000,000

16,053,137

Retirement (Gross)
Retirement (Net)

5,385,588

8,628,561

8,026,569

5,900,484
2,950,242

2009-2010

3,925,819
1,962,910

2,235,451
1,117,726

2008-2009

2,572,829
1,286,415

2,094,322
1,047,161

3,041,710
1,520,855

1,784,574
892,287

2,595,847
1,297,924

10,000,000

4,195,341

8,390,681

10,771,176

15,000,000

6,544,801

Retirement (Net Projection)

13,089,601

Retirement (Gross Projection)

5,000,000

17,257,122

20,000,000

0
2005-2006

2006-2007

2007-2008

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

2016-2017

2017-2018

30,000,000

May 11, 2016

Health Care Expenses


04/14/2016 1356

25,000,000

Health Care
20,000,000

14,172,713

13,252,888

11,413,239

11,225,664

10,088,558

9,389,107

9,564,556

9,082,797

8,530,577

8,918,557

8,745,211

10,000,000

7,846,738

15,000,000

11,988,137

Health Care (Projection)

5,000,000

10
0
2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

2016-2017

2017-2018

30,000,000

Retirement and Health Care Expenses

May 11, 2016

04/22/2016 1514

$21.3
million
total, an
increase
of $2.7
million

25,000,000

20,000,000

Health Care
Retirement (Net)
14,172,713
15,000,000

13,252,888
11,988,137
11,413,239

10,000,000

11,225,664
10,088,558
8,745,211 8,918,557

5,000,000

7,846,738

8,530,577

9,082,797

9,564,556

9,389,107

8,026,569 8,628,561

1,962,910
892,287 1,297,924 1,520,855 1,047,161 1,117,726 1,286,415
2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

2,950,242
2012-2013

4,195,341

5,385,588

6,544,801

11
2013-2014

2014-2015

2015-2016

2016-2017

2017-2018

May 11, 2016

2016-2017 Major Cost Growth Drivers


increases in compensation for existing staff
CASD

2015-2016
Estimated

2016-2017
Anticipated

Change

Payroll

51,900,000

53,457,000

1,557,000

3.00%

Health Care

13,135,000

14,527,310

1,392,310

10.60%

Dental Care

706,000

727,180

21,180

3.00%

6,705,480

8,026,569

1,321,089

19.70%

Tuition Reimbursements

535,000

545,000

10,000

1.87%

Workmen's Compensation

359,000

373,000

14,000

3.90%

73,340,480

77,656,059

4,315,579

5.88%

Retirement (net cost; after subsidy)

Compensation

$4.3 million in additional compensation expense provides funds for ZERO


additional staff members to support a rapidly growing student population.
12

May 11, 2016

2016-2017 Major Cost Growth Drivers


increases in anticipated special needs / other placements

Special Needs and Other Placements

Change

Multi-Handicapped contracted services

263,000

Early Intervention contracted services

31,000

Behavioral Intervention contracted services

250,000

Total Increase over 2015-2016

544,000

13

May 11, 2016

Student Enrollment
Chambersburg Area School District is one of
the fastest growing school districts in
Pennsylvania.
From 2012-2013 to 2014-2015
19th fastest growing of 500 by total enrollment.
State-wide data for 2015-2016 not yet available.
CASD 2015-2016 enrollment increase was above the
recent growth trend.
14

May 11, 2016

15

Student Enrollment Growth

May 11, 2016

including 2015-2016

District wide: Accelerating rapidly


10 year average growth @ 73 students per year
5 year average growth @ 93 students per year
3 year average growth @ 165 students per year

2012-2013
2013-2014
2014-2015
2015-2016

8,856 students
8,895 students, an increase of 39
8,977 students, an increase of 82
9,224 students, an increase of 247
16

Student Enrollment Growth

May 11, 2016

including 2015-2016

High School: Fastest CASD growth


10 year average growth @ 27 students per year
5 year average growth @ 52 students per year
3 year average growth @ 149 students per year

17

Student Enrollment Growth

May 11, 2016

including 2015-2016

Middle School: Flat to declining


10 year average growth @ 5 students per year
5 year average growth @ -23 students per year
3 year average growth @ -30 students per year
6th grade
677

7th grade
654

2018-2019
(students currently
in 3rd, 4th & 5th)

742

754

715

2,211

Increase

65

100

57

222

2015-2016

8th grade Middle School


658
1,989

18

Student Enrollment Growth

May 11, 2016

including 2015-2016

Elementary: Strong growth


10 year average growth @ 41 students per year
5 year average growth @ 64 students per year
3 year average growth @ 46 students per year
The current K (712) and 1st (690) classes are smaller than
the current 2nd (763), 3rd (742), 4th (754), and 5th (715)
classes. Enrollment forecast studies predicted a temporary
decrease, but also a return to 720+ class sizes.
19

May 11, 2016

2016-2017 Sources of Revenue Increases


without a real estate tax rate increase
CASD

Change

Earned Income Tax

142,000

Growth of Real Estate Tax Base

700,000

Basic Education, Special Education Funding, Ready to Learn Grant

975,000

Transportation Subsidy

100,000

Additional Revenue without a Real Estate Tax Rate Increase

1,917,000

20

10.00%

Real Estate Tax Rate Increases - Chambersburg Area School District

May 11, 2016

8.81%

05/02/2016 1414

7.15%

7.20%

8.00%

Act 1 Base Index


Act 1 Adjusted Index

4.90%
4.90%

0.00%

3.00%
2.40%
2.40%
1.90%

1.00%

2.10%

1.70%
2.10%

1.70%
2.10%

1.40%
1.70%

2.60%
2.60%

2.90%

2.71%
2.00%

2.40%

3.40%

3.50%

4.10%

3.40%

4.00%

4.40%

4.10%

3.90%

4.59%

4.70%

5.30%
5.29%

5.49%

6.00%

5.50%

Approved Real Estate Tax Increase

21

0.00%
2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

2016-2017

May 11, 2016

2016-2017 Sources of Revenue Increases


with a real estate tax rate increase
CASD

Change

Earned Income Tax

142,000

Growth of Real Estate Tax Base

700,000

Basic Education, Special Education Funding, Ready to Learn Grant

975,000

Transportation Subsidy

100,000

Real Estate Tax Rate Increase at Adjusted Index of 3.0%

Additional Revenue with a Real Estate Tax Rate Increase

2,000,000

3,917,000

22

Option #1

May 11, 2016

Maintain $2.2 million Budget Deficit


This option doesnt eliminate the deficit, but
rather keeps it from growing.
Introduces severe reductions in funding for
supplies, textbooks, and equipment.
Reductions lower levels than 2011-2012.
Holds the line on staff reductions.

23

4,000,000

Purchased Items

May 11, 2016

04/13/2016 0908

3,000,000

Equipment
Textbooks, Instructional Media
2,161,973

2,114,651
2,000,000
1,724,739

1,192,468

1,899,167
1,688,191

1,153,386
1,061,471
910,325

1,000,000

951,475

927,225
834,708

553,270

1,061,806

908,238
800,452
620,455

764,118

467,581

208,975

24
2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016
Budget

2016-2007
Proposed

Option #2

May 11, 2016

Eliminate Budget Deficit


This options objective is to eliminate the
budget deficit in a single fiscal year.
In addition to the previously described budget
reductions, staff reductions are all but
essential.
The expenditure equivalent of 27 staff reductions
would be needed for another $2.2 million in
budget savings.
25

May 11, 2016

2016-2017 Proposed Budget


The PDE-2028 budget document is based on
option #1.
$130,078,747 planned expenditure.
$3,000,000 budgetary reserve.
For several years, the budget has included a $5 million
budgetary reserve. Projections indicate CASD will not
have enough fund balance to support $5 million.

$133,078,747 maximum expenditure.


26

May 11, 2016

2016-2017 Proposed Budget


$127,845,880 anticipated revenue.
101.378 mills real estate tax rate.
3.0% Act 1 adjusted base index increase.

27

May 11, 2016

Next Steps
May 11, 2016 Tentative Budget vote
May 25, 2016 Budget Hearing
A separate meeting, usually held on the same evening as,
and immediately prior to, the regular Board meeting.

June 15, 2016 Budget Adoption vote


Must occur at least 30 days after tentative budget vote
28

May 11, 2016

Proposed General Fund Budget


May 11, 2016

29