Superintendent Mike Murphy told St. Clair R-XIII Board of Education members to expect an expense of at least $350,000 annually for the school district to add health benefits for classified staff employees.
Murphy and the board continued the discussion on the issue during their October meeting. The topic again is on the agenda this month when the board gathers on Thursday.
In September, the superintendent said expanding the benefit to classified staff would be “a challenge” because of the significance it would have on the district’s budget. Currently, teachers and administrators are provided with health insurance but other employees are not, including the full-time classified staff.
In September, Murphy estimated costs could top $400,000. That figure increased to about $462,000 a month later, but the superintendent said some of the district’s transportation employees could be “backed out” to drop the cost between $360,000 to $380,000.
The district has said a full-time employee is anyone who works 30 or more hours per week.
Murphy mentioned President Barack Obama’s Health Care Reform Law, which will require most U.S. citizens and legal residents to have health insurance starting in 2014. Obama was re-elected to a second term last week.
“We would have an expenditure out here that would be new,” Murphy told board members on Oct. 18. “And we have three options.
“The third option would be to do nothing, not spend any money on this,” he said. “But if we attempt to gain compliance, we have two other options. First would be to recover the expense through budget design or, the second option, the flip side, we can look at how we can generate the money to cover the expenditure.
“But we definitely would have to plan for an expenditure that will exceed $350,000.”
The superintendent said the board’s discussion would not include the insurance for the Franklin County Cooperative. That would be handled in a different way, he said.
Much of the discussion centered on the school district’s tax levy. The overall R-XIII rate is $3.37 for every $100 of assessed valuation, but Murphy said the 62-cent debt service levy would not be in this mix, leaving the $2.05 incidental, or operations, levy and the 70-cent teachers fund.
Murphy noted that St. Clair R-XIII currently has established an operations tax levy at the state minimum $2.75. He also said for each penny the rate would be increased, with current valuation levels, about $15,100 would be added to district coffers.
“In looking at the idea of where we would have to go, we’re looking at a quarter increase,” he said about covering the expense through a tax increase.
Doing the math, a 25-cent tax increase would pump in $377,500. The increase would have to be approved by voters.
Murphy provided information to board members that showed St. Clair R-XIII currently has the lowest operations/teachers fund tax levy in the area. Information also indicated that the state adequacy target level for that levy is $3.43. A 25-cent increase to $3 still would fall below that threshold, Murphy said.
If the board would opt to recover the expense through the budget at current levels, programs and/or staff reductions would have to be considered, Murphy said. In any regard, the superintendent said with the financial constraints the district is facing, some tough decisions will have to be made.
“I’m not trying to scare anyone,” he said in September. “We will try to work within our means. (But) we have eroded all flexibility without looking at staffing.”
In October, he said, “My intent here is to solidify the direction of the board. We’re going to need to know how we’re going to pay for this.”
Mike Drewel said he and his fellow school board members “owe it to ourselves to get the data.”
“We need to evaluate it and understand the numbers,” he said.
Board President Dave Berkel agreed.
“We don’t want to shoot in the dark,” he said. ‘We want to make an informed decision.”
Murphy said since there is an interest to know more about potential options, he will research them and bring additional information to the board in November. That meeting is scheduled for 7 p.m. on Thursday in the central office on Bardot Street.