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In an attempt to get school system employees back on track with step increases, the school system plans to ask the county for an additional $8.8 million, part of a 5.7 percent increase over last fiscal year, in its proposed $316 million fiscal 2013 budget.

Paul T. Balides, the schools’ assistant superintendent of finance, presented the 2013 budget to the Charles County Board of Education last week.

Of the nearly $16.9 million increase, $8.8 million is being requested from the county, $4.4 million comes from deferred state revenue on top of the state’s portion of new funding and the system set a target of $2.9 million in this year’s fund balance unspent revenue in addition to the $1.3 million requirement for next year for the fund balance.

The $4.4 million deferred revenue comes from funds given to the school system this year when the state reallocated money from a previous budget cut related to a federal grant for education jobs.

Balides said the $2.9 million fund balance goal on top of the already required $1.3 million means that the system is relying on funding $4.2 million of the budget on fund balance from this year, which will not only require county approval but additional savings across the system this year in order to meet the goal.

Projections based on enrollment, free and reduced-price meals program and the county wealth adjustment indicate that the schools could expect an increase of about $756,000 from the state, but Balides said that number was just an estimate as state numbers have not come in yet.

Last year, the school system received $149.7 million from the state.

The $8.8 million requested from the county would go toward school system staff. The entire amount requested is beyond maintenance of effort.

Maintenance of effort means the county would fund the school system the same amount it did the year before with any increases based on enrollment.

Last year, the county funded the school system $145.6 million, which included a $324,100 increase for maintenance of effort.

Balides said the request would go to giving system staff a two-step increase, which he said would put staff “where they should be” in terms of their pay scales.

Previous budgets during the Great Recession deferred step increases, which are regular raises tied to length of service.

Education Association of Charles County President Elizabeth Brown said in a report to the board that she hoped a request would be made to put teachers on “their correct step” and also help out veteran teachers “who have been working for the same salary since 2009.”

Superintendent James E. Richmond said after the presentation that in regards to requesting funding for employee step increases, and for the nearly $17 million budget increase, “I’ll go down with this budget because I think teachers and staff are far more important than other issues we have facing us,” Richmond said.

Richmond later said, “As much as I like technology, I’ll sacrifice it all for teachers.”

In terms of technology, the budget reflects an increase from a $3 million loan for technology to $5 million. Balides said the increase would help take advantage of low loan rates right now as the school system replaces computers older than six years and upgrades some current technologies.

Balides said there is no money budgeted for new technologies.

One of the biggest increases in costs next year will be health costs, Balides said.

This year, he said, trends indicate that insurance claims for 2012 will increase $6 million over last year. Included in the budget request is an adjustment for a projected budget shortfall and a cost increase for 2013. The increase, he explained, would result in significantly higher premiums to employees.

To help pay for the expected health care cost increases, Balides explained that the school system would essentially eliminate the Other Post-Employment Benefits budget.

Other mandatory cost increases for next year include transportation costs, $5 million in federal program funding that expires this year and increases to liability workers compensation insurance.

The school system will use lapsed salary savings targets to help balance next year’s mandatory costs.

Balides explained in an email that this is the first time in 17 years the system has relied on unidentified salary savings to balance the budget and is doing so to avoid layoffs.

Not funding OPEB, which would have been about $4 million next year, will be noticed by auditors as an item that is listed in the schools’ budgeting plans and could result in an audit disclosure, so Balides said it is important to keep that funding concern in mind in the future.

Other future funding considerations Balides mentioned were the potential for the counties to bear the burden of retirement costs in the future, which could come with a price tag of up to $8 million to the school system by 2015; the new St. Charles High School, which comes with costs of up to $18 million in 2014; new technologies in relation to the Race to the Top initiatives; and possible federal reductions, program reductions and future supplemental requests such as deferred maintenance projects.

In addition to increased costs, school lunches will increase in price according to the proposed budget by 10 cents in order to align with federal subsidy requirements.

Balides said the budget “is balanced, it doesn’t cut programs, it doesn’t cut the classroom, doesn’t cut out staff, doesn’t basically recommend furloughs or any of the more exigent things you see happening in surrounding counties.”

Richmond said after the presentation that he firmly recommends the proposal and that he is working with teacher and support staff unions when it comes to rising health care costs. The way the budget is proposed, Richmond said, the system has what it needs to operate and maintain safety.

Richmond strongly recommended the board adopt his proposal. When it comes to the county request, “we did not ask for one dime more than the two steps, not one dime.”

The school board will take action on the proposal at its next meeting and present it to the county commissioners in late April.