When looking at the proposed School District budget for the coming fiscal year, certain “cost drivers” stand out. One of them, according to Cheshire Public Schools Chief Operating Officer Vincent Masciana, is medical costs.
On Tuesday, Jan. 17, the Board of Education began reviewing Superintendent of Schools Dr. Jeff Solan’s budget request, which was presented to the BOE earlier this month. Masciana went over certain particulars of the request, going into detail on the data and how the calculations for the budget are made, with a special focus on managing health care costs.
The District is requesting a 6.46% increase, or about $5.2 million more in spending over last year’s budget. The majority of the new expenses are related to personnel costs—not only salaries but benefits—at 80.7% of the total budget. Per Masciana, 95.2% of the budget is made up of these “fixed” costs, meaning “expenditures for the core educational and operational services that are provided by (the) District.”
Of the $5.2 million, $2.67 million is for salaries, “not only wage increases for existing staff, based on their bargaining unit agreement,” but also staff additions requested by the District, Masciana said. The requested increase in benefits is $1.5 million, a 10.63% increase over the previous year, Masciana said. Although pensions, unemployment, and worker’s compensation are also included benefits for District employees, medical benefits make up about 80% of that account and comprise about 31% of the budget ask as a whole.
“Employees, through payroll deductions and their co-share, they’re paying for almost $2 million of the total cost of medical benefits,”or about 12.5%, Masciana pointed out—a number which is also subject to contractual constraints.
More expensive claims are an important part of the picture. Masciana showed that significant health struggles make up a considerable part of what has been driving increases. This includes costs for procedures to treat cancer or severe injuries that employees have suffered.
“We like to have a reserve balance so that we never run out of funding to pay our claims. What we put in is controllable. Claims are uncontrollable,” said Masciana, though he indicated the District does what it can to estimate them.
“The budget we’re requesting is not intended to build up our reserve, it’s just to try and keep claims and contributions equal so we don’t deteriorate our reserve balance,” he explained.
Mindful of finding ways to offset the expense, Masciana mentioned District events such as a Health and Wellness Fair, held in November, during which vendors offered screenings and preventative health education information for District employees.
“Early detection can save significant claim dollars, not to mention improve the health and extend the life of our employees,” Masciana said.
Health insurer Cigna also provides $80,000 a year in “wellness dollars” to the Town for initiatives such as yoga courses and health coaching.
Other increases, including maintenance and operations costs, Masciana attributed to inflation, which also affects electricity and heating. He mentioned as well the inherent difficulties associated with heating older buildings.
In November, voters gave the go-ahead for the Town to begin construction on two new elementary schools as part of the first phase of the community’s school modernization plan. However, even with the two new schools on their way, “it doesn’t mean we stop investing in the existing schools,” said Masciana. “In fact, we may need to pick up the pace a little bit now that we know which schools are staying online.”
Masciana also showed slides highlighting approximately three dozen examples of what he described as mostly unfunded state mandates the District is responsible for implementing
“Mandates do continue,” remarked Masciana. “These typically do come unfunded if there is a cost to meet the mandates, and so we’ve done our best to build a budget that would enable us to fulfil these mandates.” He added that “none of these mandates are requiring significant dollars in this year’s budget,” but did mention looming big-ticket items like zero-emissions buses that will be required by 2040.
On the positive side of the ledger, Masciana mentioned apprximately $2 million in grants for the year, including $449,389 in ARP ESSER federal funds distributed to help districts deal with pandemic-related costs.
Masciana also addressed revenue, which is paid directly to the Town. The bulk of this money is from state educational cost sharing (ECS), at about $9.4 million. Altogether, it is over $10.5 million in revenue for Cheshire. According to District calculations, without it, a Cheshire household assessed at $231,104 would owe $996.06 more in taxes.
Masciana elaborated on a point made by Solan previously, showing Cheshire’s high ECS reimbursement rate and low per pupil expenditure relative to its peer districts, which together he stated provides an enhanced value to taxpayers.
The next budget meetings will take place on Jan. 26 at Dodd Middle School at 7 p.m.