Hazleton Area budget includes $9M deficit

May 09--After weeks of combing through expenses and revenues, Hazleton Area officials on Thursday revealed the district's 2014-15 budget proposal.

As it stands, next year's budget carries a deficit of more than $9 million.

But there's fat in that deficit.

District Business Manager Tony Ryba said the next few weeks will be spent trimming wish list items that are not imperative to next year's fiscal plan.

"Usually every year when we get to this point there's a little bit of a sticker shock," Ryba said. "But these numbers include some wish list items."

As it stands, the rough draft anticipates $126.11 million in revenues with $135.61 million in expenditures for a deficit of $9.5 million.

Ryba advised the board to consider Thursday's numbers a "first pass" at the budget.

In January, the board of education unanimously approved a resolution pledging that, if a tax increase is needed fund next year's budget, the increase won't go any higher than the district's Taxpayer Relief Act index of 2.9 percent.

When the resolution was passed, directors Clarence John and Robert Mehalick said they saw no reason for any tax increase next year.

According to Ryba, the district coffers hold a fund balance of about $16 million.

The directors said in January, if there's a hold in the budget that needs to be filled, the fund balance, not the taxpayer, should fill it.

The base budget as presented Thursday includes all current staff and their contractual salary increase; debt service for the $10 million bond the board plans to acquire to fund the Maple Manor construction and renovation project, technology needs for the Maple Manor and Hazle Township Early Learning Center, 10 long-term substitute teachers, state-mandated contributions to the employee retirement fund, which increase next year from 16 percent of the employees' salary to 21.4 percent -- an increase of $3.48 million; and about $750,000 for new book adoptions and supplemental materials.

The base budget also includes revenue as projected from the state budget including an increase in basic education funding, but not the governor's proposed Passport to Learning initiative, which, if approved by the state house and senate, would bring an additional $2.3 million in state funds to the district.

The base document also includes more than $444,000 in savings realized by reducing from 30 percent to 5 percent the incentive paid by the district employees who decline district-funded health insurance.

Items not included in the base budget but deemed necessary by administration include staff and other items needed to start up both the Maple Manor school and Hazle Township Early Learning Center, as well as staff to accommodate the inflow of ninth-grade students into the high school campus when the Ninth Grade Center is turned into an early learning center next year.

Other proposals not included in the base budget are staff to boost support of the district's ESL population, which could cost more than $1 million, an in-house alternative education program, an arts and humanities magnet school, a band and chorus program for students in kindergarten through grade 8, and capital improvements to existing district facilities.

Ryba said additional revenues may also come through improved Earned Income Tax collections and Keystone Opportunity Zone tax abatement incentives that expire this year in all three counties that feed the district.

Antonelli said costs may also be trimmed and managed by phasing in wish list items over time.

When the board finance committee meets next week, Ryba said a review of staffing requests and other costs will continue.

"The board said they are not in favor of a tax increase. I think a tax increase, at this point, is a last resort," Ryba said.

At the current millage of 9.0120, Hazleton Area has the lowest tax rate among the 11 school districts in Luzerne County.

In Schuylkill County, only the Tri-Valley School District has a lower tax rate than the 29.9650 mills assessed by Hazleton Area in the Schuylkill County section of the district. In Carbon County, the Hazleton Area tax rate is the lowest by far at 27.2260 mills.

Ryba said the board is likely to vote on a preliminary budget at its May 22 regular meeting in order for the document to remain available for public inspection for the required 30 days prior to the June 30 deadline for adoption of the final budget.

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