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Salem BOE confronts a tough numbers game

January 21, 2012
Salem News

The Salem Board of Education made a wise decision Monday. Members appointed Howard Rohleder to fill the vacancy left by now city council member Jeff Cushman.

Rohleder is the Salem Community Hospital President/CEO. Few possess the skills in dealing with expenses, contracts, negotiations and the lot that come with running a highly-successful hospital. He also has served eight years as a community representative on the school's audit committee. He is involved with the Salem Area Industrial Development Corporation as treasurer and a member of its board of directors. Yes, he knows his way around numbers. That financial experience will soon be handy. When he retires in June, Rohleder will have even more time to lend his expertise to district operations.

The school district's five-year forecast includes deficits, with the cash carryover expected to keep the district in the black this year and next year and then go into the red by 2014. Salem's pending situation is not unique. There are 613 school districts in Ohio. With dwindling state money, each is confronting a cut-and-slash approach in the near future.

The contract for Salem district teachers ends this summer, prior to the start of the 2012-2013 school year. Negotiations began this week. It will be a very difficult process. Consider and ponder the five year district forecast. From 2012 through 2016, the respective revenue figures are $18,123,284, $17,719,868, $17,687,657, $17,690,461, and, $17,693,278. The respective expenditures figures for those years are $18,507,485, $18,940,020, $19,091,238, $19,253,852, and, $19,558,070. The net income for those years reads minus $384,201, minus $1,220,152, minus $1,403,581, minus $1,563,391, and, minus $1,864,791.

Balance-wise, that leaves $1,296,031 for 2012 and $75,878 for 2013. Then the district will go in the hole for a minus $1,327,703 in 2014, minus $2,891,094 for 2015, and, minus $4,755,885 for 2016. So that means when a freshman enters the high school in 2013, by the time he or she graduates the school district will be something like nine million bucks in the red unless the financial situation changes. Yikes!

Now consider the property taxes are flatlining because, like in most areas, new construction has stagnated and foreclosures continue to be rampant. Consider that for 2012 and 2013, the Salem School District lost $1.26 million from state unrestricted grants-in-aid. The state has not provided the district a new formula for restricted and unrestricted monies for 2014 and beyond making it difficult to project whether the state will increase or decrease revenue. And like everything else, expenses within the district continue to rise.

Running a school district is much like running a business. Wages and benefits by far impact expenses the most. In Salem it was 75.6 percent of the 2011 operating budget. School employees are either teaching or non-teaching. Since negotiations with teachers will be ongoing here are some numbers for the public, including taxpayers, to absorb as the district heads into negotiations for a new contract:

- The average Salem teachers makes about $50,000 yearly.

- The district pays 19 percent of about $9,500 of the 24 percent yearly requirement for retirement. Teachers pay the remaining 5 percent. That is based on a teacher making $50,000 per year.

- For health insurance, the district pays $7,448.26 per individual yearly; $17,653.44 per family yearly. On the flip side, an employee pays $35.25 per month for individual health insurance; a family pays $91 per month.

- The teachers contract for 184 days per year which includes a 7 hour, 35 minute work day for junior high and high school and a 7 hour, 25 minute work day for elementary schools. Those times include a lunch and planning period.

Salem is so very fortunate to possess a dedicated teaching force. That is proven by the many successes of our students. It's no accident. We would hate to see anything cuts-wise jeopardize staffing and programs. But the harsh reality is that with state budgeting vanishing, adjustments will have to be made. And adjustments is a nice way of putting it. From here it appears that status quo just won't be enough.



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