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Consultant presents report on funding raises for teachers

FinanceBudgets and BudgetingSchoolsConcerts

About 50 teachers and community members attended a meeting at Bel Air High School Monday for the presentation of a financial report done by a consultant hired by the teachers union that, not surprisingly, purported to find places where the county government and the public school system could find money to fund raise for teachers. The consultant made the same presentation to the Harford County Board of Education at a meeting latter that evening.

Independent financial expert R.J. Pellicoro was hired by the local teacher' union – the Harford County Education Association, also known as the HCEA - to find where the county's money goes every year and if they, indeed, have enough to fund an increase in pay for Harford teachers.

Pellicoro, using Harford County comprehensive annual financial reports and fiscal year 2013's proposed budget as sources, said reducing the annual pay-as-you-go fund for capital projects was one way more money could become available for the Board of Education.

Dion Guthrie and Dick Slutzky, Harford County Council members, however, expressed that finding such funds wasn't as easy as Pellicoro made it seem and that money would have to come by cutting other services.

The consultant told the audience that he had done previous reports for Harford "from time to time" over the last 30 years and that he looks at economic trends, such as spending, revenue and the county's priorities in its annual budget to come up with his report.

Pellicoro noted that his report did not reflect the recently-passed bill that will shift roughly $5 million in teacher pensions costs to the county next year and closer to $10 million over the next three years.

He said the county's revenues in fiscal year 2012 will exceed its budget by $15.5 million and that this year is just another in a trend of overestimates, which have averaged to about $15.4 million per year for the last five years.

"There's nothing wrong with being a conservative forecaster," Pellicoro said of consistent overestimating, "but if quality of services is being compromised," then the budget needs to be tightened.

Pellicoro also said that Harford County reducing its tax rate twice in the past three years, both times by two percent, probably wasn't a prudent move as it reduced revenue intake and, therefore, reduces funding for education.

He went on to report that the school board's budget has increased by $3.2 million, or 2 percent between the fiscal year 2011 budget and the proposed 2013 budget. Non-education spending, he continued, increased by $32.4 million, or 14 percent.

"It's hardly an equitable basis," Pellicoro said, "to have such different increases in the two categories."

Pellicoro also pointed to the $13 million increase in pay-as-you-go funding for capital projects as a possible place to move money around for education.

"Are we going to put capital projects before people and their services?" he asked. Pellicoro called funding in that category "a little overboard in comparison to other departments."

Ryan Burbey, chair for the English department at Aberdeen Middle School and a frequent speaker during school board meetings, said that since many Harford County Public School employees live in the county, when tax rates are lowered, "you're actually cutting our revenue stream."

"Moderation is so important," Pellicoro added. "This flood's going to get us if we don't stop this [financial] erosion."

Guthrie asked fellow councilman Slutzky, who represents the school board, to explain to the audience that the council's budget process, as Pellicoro's report made it look "like there's some things we can do with the money" that he said they couldn't.

Slutzky explained that any money that would go toward raises that council would "have to find that money in the existing budget."

To fund the $15.5 million increase, the school board and the superintendent requested last year, he continued, the county would have to reduce services elsewhere by that amount.

Slutzky gave the example of Baltimore County Public Schools, which did provide a raise, he said, but 200 teachers lost their jobs.

Harford County hasn't "taken one job or asked for furloughs," he said. "It's not as easy or direct as sometimes it appears to be."

Later that evening at the regularly scheduled school board meeting, Pellicoro gave the same presentation to a hesitant board.

"How in the world can this Board of Education use [this report] in a practical way?" board president Leonard Wheeler asked. He added that the board can't increase revenue and has no taxing authority.

While the board doesn't have that capability, Pellicoro said, it can "put pressure" onto the county to provide more funding. He added that he has seen other counties, though he did not specify which, put pressure on their county executives to make budgetary changes and it worked in their favor.

Vice President Rick Grambo asked if there was a correlation between high tax rates and the performance of schools, referring to Pellicoro's comments about Harford lowering its tax rate.

His reasoning was that Baltimore City has two times the tax rate of Harford and has many schools with poor performance.

"It doesn't seem prudent in a downturn," Pellicoro responded, "to also reduce the tax rate" when revenue is already down.

Grambo asked if the county should borrow more money in bonds in order to reduce the pay-as-you-go fund.

How are we to "help out the situation" in five to 10 years, he asked, if the county is paying more debt service because of bonds for capital projects.

The consultant said with interest rates so low, entities are "not saving as much" as they used to.

"It's a prudent practice if you can address your operating needs," he added.

Copyright © 2014, The Baltimore Sun
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