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WOONSOCKET â€” The School Department finished its 2010-2011 budget with a $157,000 surplus but doesnâ€™t appear to be on track for a similar outcome next year thanks to state plans for pension reform, according to school officials.
School Department Business Manager Stacey Busby was worried enough about the proposed pension changes, in fact, to give the School Committee the bad news along with her favorable report on the close out of the 2010-11 budget Wednesday night.
Busby said the surplus resulted from the departmentâ€™s efforts to prune expenditures and higher than expected Medicaid reimbursements for the year.
The department had used part of its federal education stimulus funding to create two positions charged with managing applications for Medicaid funding and resulted in the department exceeding the projections it used in setting the budget account, Busby explained.
â€śAt that time we had $900,000 budgeted and we decided to make it $1.1 million,â€ť Busby said of the projected reimbursements. â€śItâ€™s now at $1.2 million and still climbing,â€ť she said.
The account is expected to draw $1.4 million in reimbursements or more, she said.
The bad news came in the form of an email from the state warning of potential impacts proposed state pension fund changes now under review, according to Busby.
The local department is currently charged 13.2 percent of the costs of funding an employee pension in the state system, Busby said, and would see that rise to a contribution of 21 percent under changes expected to be taken up the General Assembly in the fall. The school department would also see an increase for maintenance and clerical employees covered under the stateâ€™s municipal employee system, she said. The costs for those employees would increase from a contribution of 3.4 percent to 14.9 percent, she said. The changes would require the department to add $2.7 million to its budget to cover the higher level of contributions to the state pension fund, Busby said.
â€śIf they do approve this, it would send our budget spiraling into a tail spin,â€ť she warned.
School Committeewoman Anita McGuire-Forcier said she is already aware of the pension reform implications for the local budget and warned that if the changes are approved as proposed, the local school department and the city could be forced into a fiscal collapse.
The city would be hard pressed to find the revenue needed to cover the increased pension costs, McGuire-Forcier said.
â€śBetween the city and schools we would have to increase taxes by 10.2 percent,â€ť she said.
The city has already cut its budget as much as possible and could have no choice but to â€śgo bankrupt,â€ť to solve the resulting fiscal crisis, she said.
McGuire-Forcier nonetheless thanked Busby for her work keeping the past school budget in balance and offered that even though the next two-years maybe the most difficult yet, she still believes the city will somehow find a way to pull through.
Busby said she is hoping the state does not act immediately to implement any changes made in the pension plans so the local communities will have to time to plan for their fiscal impact.
School Committee Chairman Marc A. Dubois said that despite a very difficult year, Busby was able to bring in budget with an end of the year surplus.
â€śThank you for all your hard work,â€ť Dubois told the business manager while praising her efforts to maintain a $157,000 surplus.