Employee pay and benefits make up the largest portion of the $24 million increase in the $466.1 million operating budget proposed by Harford County Public Schools Superintendent Barbara Canavan for Fiscal Year 2019.
In fact, salaries, wages and benefits also account for the largest percentage — 85.3 percent — of projected expenditures in the total operating budget for FY2019, according to information HCPS budget staff presented to the Board of Education Wednesday evening during a budget work session.
“Over $21 million of this request is related to salaries and benefits,” Deborah Judd, assistant superintendent for business services, said. “That is the largest part of this budget, and obviously it’s the largest part of the increase that we’re requesting.”
The school system has about 5,000 employees serving close to 37,800 students. Canavan’s budget request includes $263.5 million in funding from the county, $24.8 million more than the $238.7 million County Executive Barry Glassman allocated this year.
Wednesday’s was the first of four budget sessions the board is hosting this month, during which the public can offer input. The board is scheduled to vote on the budget request Jan. 22.
No one from the public had signed up to speak Wednesday. Few people overall attended, however, other than HCPS staff. So the board instead got a rundown on expenses from budget and finance office staff.
“This budget mirrors budgets that we’ve presented in the past — about 85 percent personnel and 15 percent non-personnel [expenses],” Budget Director Eric Clark said.
Non-personnel accounts cover expenses such as bus contractors, transportation services, supplies, utilities and placing students in “non-public” programs, according to Clark.
Canavan’s proposed operating budget is $20.1 million higher than the $446 million budget the board adopted for fiscal 2018.
The superintendent and her top aides anticipate $24.04 million in additional spending next year, including $15.4 million to cover two steps on the salary scale for instructional staff and a 2 percent Cost of Living Adjustment, or COLA.
Fiscal 2019 is the final year of a three-year agreement between the school board and the Harford County Education Association, or teachers’ union, to fund two salary steps and a 2 percent COLA each year to help teachers get caught up after years of salary stagnation.
The second-biggest chunk of that spending is more than $6.1 million for benefits and insurance, with the remainder going to miscellaneous expenses related to programs, facility upgrades and transportation, according to budget documents.
More than $3.9 million of those new costs are covered through savings in other areas of the budget, leaving $20.1 million that must be covered by increased revenue. The school system gets most of its funding from the county and state.
Clark displayed a chart showing how operating budget expenses have grown from fiscal 2005 to 2019, with the largest percentage increase — 127.1 percent — in benefits, followed by a more than 50 percent increase in salaries and a 20.5 percent increase in “other” expenses.
“You can see that the benefits are really the thing that is driving a lot of our requests over these past 14 years,” Clark told board members.
Benefits include health and dental coverage, life insurance and workers’ compensation, according to Clark.
“Health insurance is the largest one,” he said. “That’s the one that grows the most.”
Board member Nancy Reynolds asked how much school officials expect health care costs will increase next year. Clark said they should go up by about 7.5 percent.
“As an organization, we have done a number of things to try and curb the health care costs,” Jean Mantegna, assistant superintendent for human resources, said.
Those changes include working with employee unions to bring down costs, as well as adjusting copays for medical services, employee contributions to health insurance and employee retirement contributions, according to Mantegna.
She said HCPS’ health insurance trends are similar to national trends.
“We are continually looking at it,” she said. “We’ve made significant changes to the plans, and it is a trend that we’re going to continue to see.”
Mantegna said she considers HCPS a “very healthy organization” compared to other school systems in terms of health care costs. She said new teachers in the neighboring Baltimore and Cecil county school systems could pay $1,000 to $3,000 more per year for health plans, compared to their Harford counterparts.
“A lot of that is in due in part to the way that we are able to price our plan because of having a healthy work force, but also the value that the board places on this as part of the total compensation package,” she said.
Clark pointed out a chart in the budget comparing health care costs in Baltimore, Cecil and Harford counties as of the current fiscal year, which shows significant savings for HCPS employees.
As an example, Harford employees enrolled in their system’s HMO health plan pay $290 a year for individual premiums, compared to $1,073 for the Cecil HMO and $1,297 for the Baltimore County plan, according to the chart.
Clark acknowledged starting salaries for teachers are lower in Harford, compared to Baltimore and Cecil counties, but HCPS “becomes much more comparable” with its neighbors when health care costs are taken into account.
Board member Alfred Williamson, a frequent critic of the school system’s budgeting practices, agreed with Clark.
“That really needs to be taken into consideration,” Williamson said of the lower health premiums in Harford.
The school board’s next budget session is 6 p.m. Monday, then Wednesday, Jan. 10, and Wednesday, Jan. 17, both at 6 p.m. All sessions are in the school board meeting room in the A.A. Roberty Building, the school system headquarters at 102 S. Hickory Ave. in Bel Air.