Superintendent Warns Of Future Budget Difficulties

Letter from the Desk of the Superintendent
Budget Update

Dear Parents,

As the Superintendent of Schools, part of my job -- and a very enjoyable part at that -- involves sharing good news about so many different things going on across the district. Reports of the last two weeks of Kevin Li being one of only three students from Pennsylvania invited to the White House as a National Scholar, having seniors from the Class of 2012 accepted to every Ivy League College/University, Taylor Morgan winning another gold medal at states, and our boys baseball team’s top ten ranking in southeastern Pennsylvania are all certainly points of pride.

For this week, however, attention focuses on budget. Last Tuesday’s Philadelphia Inquirer featured a story entitled "Survey Warns of Pennsylvania School Cuts" with more than half of school districts across the state expecting financial distress within three years. The article notes “even prosperous districts feeling the heat”, like Chester County’s affluent Tredyffrin/Easttown considering increasing class sizes and passing a budget that increases taxes by 3.3-percent and using $1.5 million in savings.

The financial situation here in Upper Dublin is no better. In fact, it is even more challenging, with a proposed 4.25-percent tax increase and a major drawdown of fund balance necessary to avoid significant cuts in programs and services. Thus far, our district has been able to avoid -- or at least forestall -- the situations that have occurred in many other districts involving layoffs or furloughs that invariably result in curtailment of programs and services and/or increases in class sizes. Some contractual givebacks along with voluntary contributions by faculty and staff last year, successful refinancing of some bonds, the containment of health costs through self funding and membership in a consortium, an early retirement incentive, and an administrative restructuring plan have resulted in enough additional revenue or reduced expenses to allow us to maintain nearly all of our programs for the coming school year. Further cost reductions, however, will have to be found and implemented as we brace for a 2013-2014 fiscal year that is projected to be even more difficult.

As cited in the Inquirer article, a large part of the financial crisis stems from school employee pension payments, which are expected to triple during a time when federal and state revenues are flat at best. The situation is further complicated locally by the uncertainty of some major tax reassessment cases involving several large holdings in the district’s limited corporate industrial center in the Fort Washington Office Park. The construction of the new high school has resulted in increased taxes, but because it was approved through referendum, it has no real impact on the financial difficulties with which we are confronted. Interestingly, in terms of per pupil spending, we as a district actually still spend less than many of our neighboring school districts, despite the recent increases resulting from the cost of construction.

What does all this mean for parents, students, and the school district in moving forward? As already shared with our faculty and staff, this past year may be the last year of "normal" as we know it, in anticipation of even more difficult budgets on the near horizon. Through further cost containment, a more aggressive approach toward seeking alternative revenue sources like facility rentals, advertising, and grants, and by continuing to work together and focusing on those aspects that do, indeed, make Upper Dublin a special place to live, learn, and work, our hope is to not only maintain the quality of education but continuously look to improve it. The task, however, will not be an easy one. On behalf of the Board of School Directors, I truly appreciate your ongoing understanding and support.

Respectfully,
Michael Pladus
Superintendent of Schools