- The Enterprise
- The Recorder
The St. Mary’s County commissioners lambasted public school officials Monday for letting an estimated $6 million budget shortfall caused by health care costs snowball out of control.
School board members admitted mistakes had been made, but asked to move past that to cover the deficit to keep schools operating for the rest of the school year.
Superintendent Michael Martirano and Tammy McCourt, the school system’s new assistant superintendent of fiscal services and human resources, outlined how a recent cluster of serious illnesses and surgeries along with poor planning led to the deficit.
Claims are still coming in for the fiscal year that doesn’t end until June 30, and will likely be between $5.8 million to $6.5 million more than the $16.8 million that was budgeted for employee health insurance.
In addition, another $1.25 million will need to be found in the school board’s budget to cover overruns associated with utilities, snow removal and special education contracted services.
The school administrators outlined three options to address the budget shortfall. One option would allow the school board to use fund balances and internal savings from cuts and hiring freezes to fully address the issues. The other two options would require $1 million to $3.7 million from the county commissioners through supplemental funding or a loan, in addition to the cost-savings measures.
“My answer right now is to not bail you out,” Commissioner Todd Morgan (R) said. “Your budget, in the budget book, you had a little smoke and mirrors.”
Morgan dismissed Martirano and his two assistant superintendents to the audience after their presentation Monday, and called all five of the elected school board members to the front to discuss the budget problems.
“Maybe you can explain to the people how you got to this point,” Morgan said. He said the school board had been negligent in not knowing what was going on.
Board member Cathy Allen told the commissioners that the schools’ health care provider, Care First, had recommended several changes to the schools’ plan that were supposed to save money.
“We thought this was a reasonable choice to make,” she said, adding that in hindsight she should not have voted for it.
“It was not done intentionally,” Sal Raspa, school board chair, said. He said that no one could have predicted the number of high-cost claims that came in from school employees this year.
The projected costs given by Care First to the school board last year are coming in exactly as predicted, McCourt said this week.
Allen did take offense to the notion that the school board may have purposefully misspent money, as suggested by some of the commissioners.
“We have been cautious, we have been mindful,” she said.
“The school board continues to bring to this board unsustainable budgets,” Commissioner Cindy Jones (R) said. “I think there’s a lot of lessons to be learned.”
School board member Mary Washington told the commissioners the responsibility rests with the school board and superintendent, and that while this shortfall is “embarrassing, humiliating and humbling,” the board had never faced a deficit like this before.
“Was a mistake made? Yes, a big mistake was made,” she said. “We are human. We are coming to you to fix this mistake so it will never happen again.”
“We made a decision, and as you can see, it wasn’t a good decision,” school board member Brooke Matthews said. Still, he said the decision to change aspects of the schools’ health insurance was done with the intention to save money because of the relatively tight funding the local school board receives.
St. Mary’s public schools are the lowest-funded school system in the state when per-pupil revenue from local, state and federal funding is considered.
When just local funding is considered, St. Mary’s is funded at 15th out of the 24 school jurisdictions in Maryland. According to one analysis, the county would need to spend about $822 more per student — or about $14.8 million more each year — to fund the schools at the average per-pupil funding provided by all counties in the state.
In the meeting Monday, Morgan pointed to the funding provided by the commissioners as being more than what the state requires each year. He said he respects the teachers, and they should not get cut to address this budget shortfall. “They’re the ones who are in the classrooms [helping the school system achieve a high graduation rate] while you’re popping sparkling water. They’re the ones who are going to take it in the shorts,” Morgan said.
“All the air has been sucked out of the universe because of this issue,” Commission President Jack Russell (D) said. In trying to calm the atmosphere in the meeting, Russell said, “If we berate them enough, they’re going to leave on us.”
In solving the issue in the long term, Raspa said, “There’s going to have to be increases to premiums, there’s no doubt about that. And they’re going to be cuts.”
School employees have some of the lowest available co-pays for medical visits and prescription drugs, McCourt said. She said increasing co-pays and raising health-insurance premiums will require negotiations with school employee unions.
Martirano said preliminary talks have occurred with the school employee unions, but that no date has been set to negotiate new health insurance costs.
Union representatives said Monday that no one had yet approached them directly with a proposal to raise health care premiums or co-pays, and that health care costs are not due to be open for negotiations this year.
Commissioner Dan Morris (R) said he understands the school board must negotiate with its employees, unlike county employees.
“When they see there’s a surplus, they come to the table with their apron on and a knife and fork in their hand saying, ‘I want a piece of that,’” Morris said of the employee unions. He suggested a county commissioner representative sit in on school employee negotiations, a premise in the past rejected by the school board and unions.
“We really need to implore advice and try to work this out,” Russell said. “We’ve got to, somebody’s got to, fix [fiscal year budget 2014] before we move ahead.”
The school board and commissioners now are in the midst of planning next fiscal year’s budget. McCourt said already the school board has decided to increase its health care budget to $25.3 million.
Martirano praised McCourt for discovering the deficit when she first was hired earlier this year. Still, Martirano lamented that he had not known about the problems earlier in December, which would have given him more time to put cost-savings measures in place, he said.