CV school board officials hear pension reform update
BY DONNA WALKER, Correspondent
Conestoga Valley School District would save $429,771 right off the bat in 2013-14 if Gov. Tom Corbett's pension reform plans and budget are implemented in June.
In five years, savings would amount to $4.5 million.
Kim Seldomridge, Conestoga Valley's director of administrative services, presented to the school board an update Monday on how Corbett's proposed state budget would affect the school district.
As the board prepares to adopt a preliminary budget for 2013-14 on Tuesday, it heard that a number of line items could change by hundreds of thousands of dollars if the governor's plan is approved.
"This is the most difficult year to budget for state subsidy since I've been in the business," Seldomridge said. He confined his analysis to the pension reform part of the governor's proposal.
Pension reform is needed because of rising contribution rates and costs, according to the state's Budget Day Pension Presentation at www.portal.state.pa.us.
The state has mandated districts not only pay more for pensions each year, but pay a higher percentage of payroll than they paid the year before. The rapid growth is costing local taxpayers millions.
Corbett is proposing a smaller dollar amount be directed toward pension funds than what is currently mandated. For example, CV's preliminary budget shows taxpayers will fund $4,567,599 toward 2013-14 pensions. That's $1.38 million more than in 2012-13, a 44 percent increase.
Under the governor's proposal, CV taxpayers would fund $3,960,564 of retirement costs for 2013-14. That's $812,300 more than 2012-13, or a 24.48 percent increase. The increase proposed would continue at a modest rate for five years.
"It levels off and in 2018, we would have a fund balance of $9.5 million versus $5 million without (pension reform)," Seldomridge said.
To lessen the burden on taxpayers, the state wants to change the pension system for current employees. Its proposal doesn't raise taxes and doesn't cut funding for core programs in education.
"The message from the governor is, there needs to be pension reform," Seldomridge said. "If there isn't, they will have to cut core funding and core programming."
CV school board members were advised to stay the course. Next week, the school board will be presented with the same preliminary budget it saw last month and will vote on its adoption. That budget proposes a 2.5 percent increase in taxes for Conestoga Valley residents.
"Usually we follow what the governor presents. But the reform of the pension system will take some time," Seldomridge said.
The school board adopts a final budget in May and sets the tax rate for 2013-14 at that time.
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"The message from the governor is, there needs to be pension reform. If there isn't, they will have to cut core funding and core programming."
CV director of administrative services