School budget crunch looms

Metro district officials point to rising health costs

`Some belt-tightening'

Carroll Co. shortfall of $1.5 million may be start of trend

April 22, 2001|By Jennifer McMenamin | Jennifer McMenamin,SUN STAFF

Faced with rising health insurance costs, Baltimore-area school systems are keeping a close watch on year-end budget figures, cutting spending and dipping into reserves to stay in the black.

"We're looking for $1.5 million out of this year's budget," said Carroll County interim Superintendent Charles I. Ecker.

"Our health insurance expenses keep coming in a couple hundred thousand dollars more a month than anticipated, and if that continues, we could be looking for more. It could be $2 million," he said.

While Ecker has ordered a spending and hiring freeze to squeeze at least $1.5 million out of the Carroll schools budget in the last quarter of the fiscal year, other metropolitan counties' school systems have transferred funds and are preparing for higher expenses next year.

"We're already budgeting for increased costs for next year," said Sydney L. Cousin, Howard County's associate school superintendent for finance and operations. "We try to stay on top of that as much as we can."

In Carroll, school officials have taken a broader approach to curtail costs.

Orders for new and replacement equipment, including computers, furniture and vehicles, have been postponed. Job vacancies - from the construction and maintenance departments to secretarial and clerical positions - aren't being filled. Temporary employees and consultants have been cut back. Overtime pay has been restricted to emergency purposes and must be approved by several levels of management. And teacher training and staff development projects have been put on hold.

"We're doing some belt-tightening all the way around," said budget officer Carl Welsh. "But it's not like we can't do a report because we don't have a typewriter in this office or that kind of thing."

A health insurance advisory group, composed of representatives from each of Carroll's local unions, has been charged with evaluating current costs. Through contract negotiations, they'll determine whether employees should pay for some of their health costs. Carroll is the only school district that picks up the tab for 100 percent of its employees' health care, school officials said.

To prevent teachers and students from feeling the budgetary pinch, however, Ecker and his budget staff have directed most of the cuts at the central office.

"Basically, the money I'm using to operate day to day is what I've always had," said Principal Anna Varakin of Mechanicsville Elementary School. "So I didn't go into a panic mode. But the bottom line is, if they don't have the money, they don't have the money."

Varakin said the budget cuts do reach the school in an indirect way through the elimination of a budget category called "temporary money."

What that means for the school is that its language arts specialist can no longer attend the monthly meeting of the county's language specialists because there is no money to pay a substitute teacher to work with pupils in her absence.

In Baltimore County, the County Council dipped into its reserves in November and transferred $12.9 million to cover the rising health care costs of county workers, including schools employees. A large part of the increase was due to a larger amount being spent on prescription drugs.

The council also approved payment of nearly $90,000 to a New Jersey company that will ferret out physicians who appear to over-prescribe expensive medications.

Howard County school officials have been tracking the increase in insurance costs for some time, but they don't expect to start feeling a crunch until next year.

Still, Cousin, the associate superintendent, said he doesn't expect the surge in insurance expenses to cause major cuts in academic or other program areas. Rather, it will force the superintendent and Board of Education to be more conservative.

"Obviously, that's money that can't be spent in other places," Cousin said.

In Anne Arundel County, government officials expect only a "small deficit" when the current fiscal year's health insurance costs are compared in September to what was budgeted last year.

"We are spending at a somewhat greater rate than for the same period a year ago, but not alarmingly so," said Thomas W. Mullenix, the county's director of employee benefits. Last year's health insurance costs came in within $10,000 of projections, he said.

Anne Arundel school officials blame a $2.5 million spike in health care costs - perhaps more by the time the budget books close for the year - on the increasing cost of prescription drugs. Still, budget officers expect they will be able to find money in the existing budget to cover the shortfall.

"We are sitting here right now wrestling with this year's cost," said Jim Goodwyn, the county's lead budget analyst. "I don't think anyone is escaping it at this point."

Sun staff writers Lynn Anderson, Scott Calvert, Larry Carson, Stephanie Desmon, David Nitkin and Tanika White contributed to this article.

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