Lampeter-Strasburg School District Finance Committee Meeting – February 28, Budget Discussions 1

Adjusted Preliminary Budget 2

Preliminary Budget Increase in real estate taxes due to a 2.95% millage increase. Note state revenue is based upon level basic education funding. 3

Breakdown of Expenditure Differences from Projected to Budget – Salaries and Benefits 4

Breakdown of Expenditure Differences from Projected to Budget – Other Objects 5

Earned Income Tax 6 Decline of $105,278 in is due to EIT collection falling under Act 32 beginning in The June distribution is expected to decline significantly due to employers adjusting to new collection requirements. Distributions prior to 2012 were made based upon historical formulas and total county wide funds collected. Beginning in 2012 actual dollars must be distributed by resident municipality and funds cannot be distributed if collections are not properly labeled. In addition, headquarter location may determine to what tax collector the funds are sent.

Medical Insurance Budget The district is insured for aggregate claims that exceed $5,760,000 which means if the district would reach this aggregate limit, the internal service fund (set up to be used for this purpose) would cover the $1,290,100 over the general fund budget. The financial impact of reaching the aggregate would be felt in the fiscal year.

Expenditure Reductions Considered in Current Draft 8

Significant Considerations – State Subsidies  Basic Education Funding reduced due to state budget shortfall  Edu-Jobs funds then used to back fill the basic education funding  Net effect is no impact upon basic education funding  Due to use of Edu-Jobs in and end of ARRA in , the funding gap in becomes $1 billion  Speculation that Basic Education Funding could drop to levels meaning a further reduction in state revenue for L-S of $766,000  Governor’s budget to be announced on March 8,

Significant Considerations – Outcome of Retirement Incentive  Final enrollment into the District’s retirement incentive becomes known on March 15, 2011  Based upon current information, the additional savings beyond the $267,000 already assumed in current budget draft could range from $104,000 to $357,569. This assumes only one retiree’s position not filled. 10

Significant Considerations – Outcome of Memorandum of Understanding  Each student day removed from the schedule will reduce total cost by $95,140  Each non-school day removed from the schedule will reduce cost by $83,500  Proposed 2 student and one non-student day which would reduce costs by $273,780 11

Potential Budget Scenario 12 This potential scenario is meant to illustrate the dynamics between several key unknown factors and their impact upon the amount of future expenditure reductions that are necessary. In this scenario, to not affect fund balance, the district will have to cut an additional $363,010 to keep the millage at 2.95%. In order to decrease the millage rate increase to 1.98%, an additional expenditure reduction of $285,710 would be required.

Strategies for Eliminating Budget Deficit See lists attached to powerpoint handout - Administrative List - - Staff Suggestions 13

Important Dates  March 8 – Governor’s Budget Address  March 15 – Retirement Letters Due  March 22 and 24 – Community Meetings  Finance Committee Meetings – Two in April  May 16 – Proposed Final Budget presented at Board Workshop  May 23 – Adoption of Proposed Final Budget  June 23 – Adoption of Final Budget 14

Questions and Discussion 15