All things being equal, Harford County Public Schools would need almost $35 million in additional funding to operate during the next school year in 2019-20 – an increase almost certain not to happen – HCPS Superintendent Dr. Sean Bulson said.
Speaking during a public budget work session in Bel Air Tuesday evening, Bulson once again talked about the financial challenges facing the 38,000 student system as he prepares his first budget since becoming superintendent July 1.
Although much of his presentation had been shared in other forums he has held over the past few months, Bulson said one the drivers of increased costs facing HCPS – health insurance costs for almost 5,000 employees, as well as some retirees and their spouses – is likely to be higher than previously projected.
Several weeks ago, Bulson said HCPS, which participates in a health care consortium with Harford County government, Harford Community College and the county public library system, was facing a projected increase of 10 percent for its health care expenses.
A since revised estimate has put that increase at 15 percent, he said Tuesday, meaning next year’s total health care expense would be $93.8 million of the total projected expenses of $485.3 million, about 19 percent. Salaries would cost almost $281.4 million and other expenses $110 million, for a grand total of $485.3 million, Bulson said.
$35 million gap
The current HCPS operating budget is $461.7 million; however, Bulson said the decision by the school board last June to balance the current budget with almost $11 million from cash reserves – or fund balance – leaves the system short that much going into the next budget, because the reserves were dangerous depleted — hence the $35 million difference, if the projected expenses of $485.3 million next year are to hold.
That, Bulson said, “is the current gap we are trying to fill as we balance this budget.”
“Knowing that we will be going to the county and asking for an increase in revenue, I’m pretty confident we can’t ask for that much…,” he continued, saying the county “can’t sustain increases of that much, so we have to do our part on the budget side to think how we are going to reduce that gap [$35 million] and, frankly, that’s going to require cuts.”
“Now the function of this process is to think about how we are going to achieve those,” he said.
Bulson also discussed at length the health care cost conundrum, presenting statistics that show the average age of an HCPS has been increasing and is currently 46.1 years. The average age of system retirees also is increasing and is currently 72.1 years. On one hand, he said, being able to retain an experienced workforce is a plus; however, having older employees and retirees, also typically causes health care costs to rise.
But he also cautioned that to try to cut costs by making employees contribute more to their insurance premiums risks making HCPS less competitive with other school systems. He acknowledged that HCPS employees – who pay just 10 percent of their health premiums – have among the least expensive benefits package in the state.”
According to figures Bulson showed, the average starting salary for a HCPS teacher ranks about the middle of Maryland’s 24 school districts — 11th – but when benefits costs are taken into account, the first-year teachers take home pay ranks third behind Baltimore City and Montgomery County.
“One of the things as we move forward through budget process is to be thinking about we need to remain competitive on our compensation, as a district we have in many ways invested heavily in health care as something that differentiates us and sort of makes this district more attractive,” Bulson said. “There are really no places you can go in the state and get a better benefits package as an employee, and if we were to do anything to disrupt that, it would diminish our ability to become competitive as a workforce marketplace.”
Still, he said, health care is likely to remain one of the drivers of higher HCPS expenses, “so this is an important part of what we are discussing and will be an important part of every consideration we have.”
The superintendent also reiterated his five key topics that grew out of his recent public listening tour: reading proficiency; mental health support for students and employees; engagement — principally at the middle school level; growth – in individual student performance; and expanded high school programs.
Public comments, questions
In turning over the program to the small audience gathered in the school board’s meeting room at HCPS headquarters in Bel Air, Bulson heard some concerns, most of them repeated from past public sessions before and since he became superintendent, as well as fielding some questions.
Among the concerns voiced were the need to restore position cuts made this year in library support staff and teacher specialist positions, as well as the need for more positions in special education, both teachers and classroom aides, and expansion of gifted and talented programs to other grade levels beyond third to fifth, “because students are just not gifted in grades three through five.”
Speaker Jean Smith asked Bulson if it would be possible to increase staffing and services in the Office of Equity and Cultural Proficiency and, if it isn’t possible to add positions, to create a task force to consider expanding “restorative practices” and, recognizing constraints on the budget versus Bulson’s stated priorities, “are there are any plans to expand the mental health staff for Harford County Public Schools?”
She also posed another question on behalf of a teacher she said was unable to attend on a subject that has come up often in the past year: “Will you be getting input from teachers regarding whether one-to-one technology or textbooks would better serve the students of Harford County Public Schools?”
Bulson was asked by another speaker if the school system’s unions had been polled to see if they would be amenable to increases in their health insurance premiums, “if it keeps resources in the classrooms and to support the teachers in the classrooms.”
Because there were only seven speakers initially, Bulson did try to address some of the questions and talk more about the budget process and some of the scenarios being discussed by staff and school board members, the latter who have been involved in the process since the beginning unlike prior years, he said.
“We are reaching the point [in the process] where the revenue and expenditures need to match,” he said.
One key question, he said, if they were able to keep salaries and benefits at current levels, “what would that mean about the number of employees we are able to have – how do we absorb cuts related to that?”
Overall, they are looking at “eight digit cuts” and explained again how he has five internal teams working on the budget, two of which are trying to determine how to cut expenses in the current year, if possible. He also reminded the group he had already instituted a hiring freeze at the start of the school year.
He also mentioned the possibility of outsourcing some services, primarily to save on health care costs, but warned outsourcing has advantages and disadvantages. “It’s something we would have to study so carefully, I wouldn’t want to do it” immediately, he said, mentioning 2021 at the earliest to consider outsourcing.
Bulson said he still is not ready to give a date when his 2019-20 budget will be made public. Typically, superintendents have sent the budget to the board in mid-December, but Bulson said that won’t happen this year.
Because the board members have been involved “almost from the beginning,” he said, he is hoping for “a slightly quicker turnaround” for the board’s review that in years past has run six weeks to two months.