BCSC predicts ‘challenging’ 2020 with budget

Phillips

Bartholomew Consolidated School Corp. officials are projecting a “somewhat challenging” year from a budget standpoint due to increasing employee health care costs, declining tax capital and an estimated reduction in state funding.

Details about the school corporation’s proposed budget were laid out by BCSC Assistant Superintendent Chad Phillips on Monday during the school board’s meeting at Clifty Creek Elementary School.

The proposed budget includes $49.3 million in employee salaries, a 1.65% increase from the 2019 budget, and $19.8 million in benefits, including health costs, which is an 8.2% increase from this year’s budget. Salaries and benefits would make up about 97% of estimated expenditures — every other area of the corporation’s education fund, including supplies, property and equipment, would likely see cuts, according to figures presented during the meeting.

The increase in health costs is, in large part, being driven by health claims and prescription medication costs, said Phillips.

“This impacts every single budget we have,” Phillips said. “We will purchase fewer buses, fewer computers, less furniture and equipment and have less money for raises and for hiring people because of the skyrocketing health costs.”

The school corporation is self-funded for health insurance costs.

Health expenses rose 14% from Jan. 1 to July 31 — the largest increase since 2016, according to figures presented during the meeting. The school corporation struggled to pay healthcare claims during the last two weeks of August, which totaled roughly $1 million, Phillips said.

“We did not have enough cash in the bank to pay the claims,” Phillips said during the meeting. “Luckily, we work with good providers and a third-party administrator to work on smoothing out the claims over the coming weeks as we try to correct the structural deficit we have in our Health Trust (account).”

Phillips said a 15% increase in employee premiums and expected reimbursements for large claimants should help offset much of health expenses incurred throughout the rest of the year.

“The district pays $6 for every $1 that the employee pays in,” Phillips said. “Not only does this impact our 2020 budget, but our 2019 budget is being impacted as well. I will be likely coming back, probably in October, with an additional appropriation request because we will spend more in 2019 than what you had approved back last fall. That was anticipated last fall. By the time you approved the budget in October, we saw that health claims expenses were already exceeding what we had increased premiums for 2019.”

The overall projected 2020 school corporation budget is estimated at $117 million, a $2 million increase compared to the 2019 budget.

“The 2020 budget is up about 1.8% over 2019’s budget,” Phillips said during the meeting. “In what should have been a year filled with good news — because there were lots of good signs — health premiums, decreases in (average daily membership) and tax capital losses will make it a somewhat challenging year from a budget perspective.”

A budget hearing has been scheduled for 6:30 p.m. Sept. 23 at Clifty Creek Elementary School. The school board is expected to consider the budget during its Oct. 21 meeting, which will be at 6:30 p.m. at Mt. Healthy Elementary School.

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Budget hearing: 6:30 p.m. on Sept. 23 at Clifty Creek Elementary School

Budget adoption: 6:30 p.m. on Oct. 21 at Mt. Healthy Elementary School

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