August 30, 2011

Woonsocket School Dept's Balanced Budget: Savoring the Good Times - However Fleeting in the Absence of Pension Reform

Monique Chartier

[Note: In the article excerpted below, the Woonsocket Call, bless them, is using the term "pension reform" erroneously. What they are referencing is the "proposed increase of employer pension contribution".]

[Note II: In the note above, the word "employer" is used as it has widely has in the indicated phrase. While technically correct, it is, in this context, a euphemism. A more accurate term would be "state and city" or, to be completely precise, "taxpayer". Thus: "proposed increase of pension contribution from the taxpayer". Thank you. There will be no further Notes before the start of this post.]

As a semi-regular critic of Woonsocket's (and other cities') seeming refusal to bring their budgets, school and municipal, into line with their revenue, I'd like to be one of the first to applaud Woonsocket's recent achievement.

The School Department finished its 2010-2011 budget with a $157,000 surplus

A surplus! Very nice. So that means that we're getting FYN (Fiscal Year Next) off to a good start, right? Right???

... but doesn’t appear to be on track for a similar outcome next year thanks to state plans for pension reform, according to school officials.

School Department Business Manager Stacey Busby was worried enough about the proposed pension changes, in fact, to give the School Committee the bad news along with her favorable report on the close out of the 2010-11 budget Wednesday night.

Ah. We would be off to a good start except for the higher pension contributions necessitated by the recent adjustment downward of the rate of return on pension fund investments.

While the rate of return had to be adjusted, it's dismaying that the Woonsocket School Committee finally gets their budet in line after considerable effort only to have the chair kicked out from under them next year. Woonsocket taxpayers are looking at a 10% increase in their tax levy just to cover this increase in pension contribution.

And of course, Woonsocket is far from the only municipality facing this situation.

At some point, it becomes difficult, to say the least, to responsibly budget for the astronomical promises carelessly made by someone else.

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"The School Department finished its 2010-2011 budget with a $157,000 surplus"

Question: Knowing that the state supplies 75% of the Woonsocket school budget, does that mean that 75% of that $157,000 will go back to the state? Clearly a surplus means the city got more money from the state than they needed.

Posted by: Patrick at August 31, 2011 9:41 AM
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