Madison Schools Facing $12.4 Million Deficit

Stark reality for the Madison School District for next school year.

Superintendent Dan Nerad won’t make his preliminary budget recommendations until April 1, but in its first look at the 2012-13 school budget, the district is projecting a $12.4 million deficit based on current budget trends.

Factoring in rising insurance and fuel costs, the district projects general fund spending of $319.7 million, up from $310.9 million this year. Revenues are projected to be $307.3 million.

The district is looking at several options to close the gap, such as eliminating its most expensive health insurance option, renegotiating nonunion employee contracts, energy efficiency projects, refinancing debt and raising property taxes, said Erik Kass, assistant superintendent for business services.

But the district doesn’t want to do what other districts around the state have done – have employees contribute more to their health insurance premiums.

One way Madison expects to close its $12.4 million deficit this year is to eliminate Wisconsin Physicians Service as an insurance provider, which would save about $5 million. Madison Teachers Inc. agreed to that option as part of the current contract.

The union also agreed to pay up to 15 percent of the premium for the other three insurance options, Group Health Cooperative, Dean and Physicians Plus. But Madison didn’t exercise that option last year and might not have to this year, Kass said.

The 15 percent contribution would generate up to $7.5 million in savings, but would cost teachers up to about $900 for a single plan and $2,700 for a family plan. Most other districts around the state had employees pay more toward premiums last year.

MTI executive director John Matthews said an average teacher is already losing about $2,600 in take-home pay because of the pension contribution. Not having to contribute to health insurance premiums would be “a huge relief.”

“Many employees were forced to reduce their standard of living, many are having financial problems, some unable to afford college tuition and some are unable to qualify for mortgage to enable home purchase,” Matthews wrote in an email.

School Board President James Howard said asking employees to contribute more than what they do now would be a “double whammy” because they also are affected by property tax increases. But the board may look at ways to spread out the budget’s impact.

Why can’t employees in the Madison school district do what private sector employees have been doing during the current economic downturn?  Why should they not have to make adjustments in their standard of living and pay more?

Instead the Madison Metropolitan School District thinks it is better to raise taxes to cover the shortfall.  To not exercise options that the union agreed to is absurd.  But then again it was also absurd to agree to new contracts with the unions last year before Act 10 became law.

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