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Hall superintendent: Benefit costs on ‘unsustainable path’

POSTED: May 16, 2017 5:50 p.m.

Hall County Superintendent Will Schofield

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The escalating costs of providing benefits to public school employees are “on an unsustainable path,” and without a solution, they will continue to make balancing local school budgets difficult, according to Hall County Schools Superintendent Will Schofield.

Schofield said Hall County’s proposed 2018 fiscal year budget includes nearly $6.5 million in new costs for employee benefits to go along with more than $4 million for a 2.5 percent pay increase for all employees.

“That’s a one-year increase, and that’s just an awful lot of money,” he said. “That’s a mill and a half of local taxes. That’s $6 million that would have been going to something like reading teachers or additional software licenses or additional books for libraries.”

Schofield said more than $11 million of the $13 million in increased spending in the proposed 2018 fiscal year budget is related to salary and benefit increases for employees. The county budget plan includes both budget cuts and taking up to $6 million from the district’s fund balance to cover the increases. He added that the burden on local school districts is likely to continue to increase, potentially leading to more future cuts.

“Unless there’s a new stream of funding or we come up with some new models that cut costs, it certainly will require cuts in other places,” Schofield said. “Continuing to generate more revenue, certainly as a conservative, doesn’t seem to be the answer to me. I would think it’s going to have to be being more thoughtful on a national level about how we handle some of these issues.”

The proposed 2018 budget for Gainesville City Schools calls for more than $2.3 million to be taken from the district’s fund balance to cover the cost of new expenditures. Chris Griner, chief financial officer for the city schools, said all but $400,000 in additional budget needs for 2018 are related to employee salaries and benefits.

The Hall County and Gainesville school districts spend about 85 percent of their budgets on employee salary and benefits. In 2018, all school districts will be required to pay 16.81 percent of each teacher’s salary to the Teacher Retirement System (up 2.54 percent), 7.65 percent of salary for Social Security and $945 per month for the employer’s portion of health insurance premiums. Districts have been paying $945 a month for their portion of employee health benefits for teachers, but were paying less for classified employees, those who are not teachers. School districts will start paying that amount for non-teachers in January, which will be an increase of $98.80 per month for each employee, said Griner. He said classified employees make up about one-third of the school district’s 950 employees.

“It’s one of those things that we have no control over; we just have to implement it,” Griner said.

“It’s unfunded mandates that have to come out of local funds. We’re fortunate to have a decent fund balance.”

Gainesville Superintendent Wanda Creel said districts usually have about nine to 12 months of advance notice from the state of increases in the employer portion of benefits.

“We have seen for a number of years an increase in the health benefits as far as the costs to the districts,” Creel said. “We certainly want to provide benefits to our employees. It does add quite a bit of an expense to a district’s budget. Currently we only have the state health benefit process that is basically our tool for providing benefits.”

The 2018 city school budget that is currently being considered has a 2 percent pay increase for all employees and doesn’t cut programs, Creel said. She added she is concerned about the impact of state funding, which often funds local school districts in lower amounts than are stipulated in state formulas.

“This year we had an increase in state health benefits in health costs for classified staff and an increase in the Teacher Retirement System portion that the district has to pay for teacher retirement, so we saw two increases at one time,” Creel said. ’“If there continues to be not fully funding of state funding formulas or revenues in different areas become stagnant or reduced, we would have to look at whether it makes an impact on our employees or makes an impact on our students. We certainly want to always be able to provide the services for our students.”

Schofield said he believes the solution to health care benefits ultimately needs to be settled at the federal level.

“These are national issues, and we see it playing out every day with the health care debate,” Schofield said. “We’ve got an aging population, and, as the boomers get older, everybody is living longer, and health care costs are exploding. When I say unsustainable, I don’t mean just at that local level. At a national level, we have those same issues happening that are indeed unsustainable.”


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