Today I will start to discuss a topic that is important for the school district and the community. That topic is the state of the school district’s finances. The folowing comments are my reflections on what has happened and does not reflect any official position. First of all, Ridgway Area School District is positioned very well for the financial storm that Pennsylvania school districts will face in the coming years. RASD will have no debt service after the next budget year. In personal finance terms, the school district will have no outstanding loans. This is obviously a good thing. The school district also has a healthy fund balance. State law prevents school districts from putting too much money in the fund balance; however, the school district has designated parts of the fund balance for projects and budgetary items that will increase over the next few years. With all of that being said, as I stated in an earlier blog, there are signs of stress in the budget. Namely, the school district has had to use money from the fund balance to balance the budget. You can equate this to using your savings account at home to pay your monthly bills; eventually the money will not be available. While I am proud about the state of our local financial situation, I have concerns about the state and national financial situation. Today I will focus my comments on how Pennsylvania used federal stimulus funds to balance the state educational budget.
What do these numbers mean for RASD? If the state does not include a level funding formula in the 2001-2012 budget, RASD will have $600,000 less in our basic educational funding. This is a significant decrease in funding for the school district. While the school district contemplates this loss of revenue, there will also be a financial burden caused by the employee pension crisis. I will explain this crisis in tomorrow’s blog, but the school district may realize an additional $500,000 in expenditures in three years as a result of the pension crisis. If you add the $165,000 that we used from the fund balance to use in our budget, you will see that the district may have to find over a million dollars in program cuts and different sources of revenue. This will be a challenge, but a challenge that the district will be able to endure. There will be tough decisions to make concerning the budget but I firmly believe that the school district will be able to increase the capacity to help students in the future.