Buffalo, N.Y. (WBEN) - As schools in Western New York get back into the swing of the academic year ahead, budget talks are seemingly a year-round issue. And for many superintendents, rising costs are making for even tighter budgets each and every year.
Sweet Home Central School District superintendent Mike Ginestre told WBEN this past Friday they are running an extremely tight budget this year after needing to close a $2.5 million gap to balance the district's budget last year.
"It's scary out there right now when we're talking about healthcare costs, transportation costs, utilities are out of control. So we budget for a certain amount, but all of those line items exceeded our budget," said Ginestre with Brian Mazurowski and Susan Rose. "We ran a deficit, we're using reserves to fill that deficit last year, and the past three years we've been doing that because of these uncontrollable costs that we're mandated to do. So we're running really tight this year. We're going to try and stay as balanced as we possibly can."
Ginestre certainly knows this is not unique to Sweet Home, especially when it comes to the rising costs for healthcare, as Sweet Home saw a 13% increase in the healthcare line this year.
Recently retired superintendent of Niagara Falls City Schools, Mark Laurrie knows well that education is a people business, and when there are people, there are salaries and benefits that make up nearly 75% of a district's budget.
"Healthcare costs, along with salaries, are the first things that you have to put into a budget mix when you're planning for the following year," said Laurrie in an interview with WBEN. "Like Sweet Home, the Niagara Falls budget increased 12% year-to-year, and when you do that and have 1,500 employees, you can begin to do the math and figure out what an increase that is."
Every time health insurance increases for districts, Laurrie knows the price has to be paid somewhere, and sometimes it has to come from certain school programs. He acknowledges, though, those programs are the last thing any superintendent ever wants to touch.
"You're really not able to shop around health insurance for your members because it is all union negotiated. So you have to really work with your healthcare provider, you have to continue to stress with them that the rising costs affect programming for kids," Laurrie noted. "I know a lot of that is out of their control, and I think you have to budget up front a very, very - I would say - conservative number. To do it again, I would be looking at 15% from year-to-year, that would give you the cushion. And when you do it, something has to give, and I think the only thing you can hope to do is to continue to plan ahead, continue to work with your healthcare providers, work with your unions."
The rates at which items like healthcare costs increase continually fluctuate, and districts are constantly in a guessing game as to what the increase will be when finalizing a budget for the next academic year.
"You're doing your best thinking in January, February, because your budget has to be done at the end of March. And then after that, the state budget comes in later, and oftentimes the healthcare numbers don't come in until the end of March or April. So, really, the best formula that I found was to be very conservative, probably over budget the number, and hope that it comes in lower," Laurrie said. "But working with your healthcare providers, letting them know the urgency of how you need to know, and oftentimes those are managed by large boards. We are - in Niagara Falls, along with a number of other districts - in a consortium of school districts where we pool our healthcare costs across the state. We felt, at the time, that was the best way to do it. But even in that pooling system, to get into the double-digit increases like we have recently is something that is inevitable, and has to be budgeted for first."
And like Ginestre, Niagara Falls had to take into consideration how rate increases for items like transportation and property casualty insurance will cut into the budget without knowing how much the district is actually afforded for the upcoming year.
"Those are unpredictable numbers as well, and you often, again, don't get those numbers until after your budget has been approved by the Board of Education and the state budget's been approved. So it's a real delicate, interesting dance and mix you have to do, and you have to remember there's only so much money that comes to you, and the only place to go to are people and programs. And they're the last things you want to touch as a superintendent, but it's getting more-and-more difficult. There is no doubt," Laurrie said.
"When you have people, you're going to have salaries and benefits that make up nearly 75% of your budget" - Mark Laurrie
"When you have people, you're going to have salaries and benefits that make up nearly 75% of your budget" - Mark Laurrie
