The Record-Review – The official newspaper of Bedford and Pound Ridge, New York

 

By JACKIE LUPO

Katonah-Lewisboro School District’s expenditures per pupil were the highest among comparative districts last year, according to a report presented by the board of education’s finance committee at the May 31 school board meeting. At $27,998 per pupil, Katonah-Lewisboro outspent Harrison, Byram Hills, Scarsdale, Chappaqua and Bedford overall, and put more money per pupil into instruction and benefits, per pupil, than any of those other districts. The committee estimated that if Katonah-Lewisboro’s 2010-2011 spending had been in line with the average of the selected districts, the district would have spent $6.7 million (or $1,752 per pupil) less last year.

Last year, Katonah-Lewisboro spent $21,483 per pupil on instruction and employee benefits, more than any other district in the peer group.

Why the emphasis on cost per pupil? For one thing, this figure can be affected by the changing demographic picture in the district. When enrollment in a school district declines, as it has been doing in the Katonah-Lewisboro district for almost a decade now, the per-pupil costs will rise if expenditures are not trimmed to reflect the fact that the district is serving a smaller population. When this happens, it’s up to the school district to figure out how to bring expenditures back in line with enrollment. Staffing levels may be re-examined, and expenses are scrutinized. But this can be a tricky balancing act. Staffing cuts are not popular with residents whose children might end up in larger classes than what they are used to. And it can be especially hard to keep per-pupil costs down when some budget items, such as health insurance and fuel, go up year after year, and when salary scales and benefits are subject to collective bargaining laws and state mandates.

When the committee first looked at the group of comparative districts a year ago, they found that Katonah-Lewisboro’s spending for 2009-2010 had outpaced all the comparative districts; the district’s highest areas of spending were instruction, benefits and transportation, while its general support costs and debt level spending were lower than average.

“We dug a little bit deeper and focused on certain aspects of our per pupil expenditure,” said trustee Michael Gordon. Board president Mark Lipton explained that the purpose of the study was to analyze the data. “It will be up to the board of education — next year’s board — to decide what to do with that information.”

Finance committee member Howard Averill said the report was based on work started over a year ago, aimed at “coming up with a reliable, objective, numbers-focused way of looking at spending in Katonah-Lewisboro vs. other districts. The committee chose nearby “high-quality, high-spending” districts with similar enrollments, in order to come up with appropriate benchmarks to look at spending objectively. The information in the analysis was based on the audited financial statements of all the comparative districts.

In 2009-2010, Katonah-Lewisboro per-pupil spending was $27,197, 5.9 percent above the average of the group of districts. By 2010-2011, that figure had risen to $27,988, 6.7 percent above the group average of $26,236.

Last year, Katonah-Lewisboro spent $21,483 per pupil on instruction and employee benefits, more than any other district in the peer group and 7.7 percent more than the group average. When the figures were broken down to separate instructional costs (i.e., salaries) from employee benefits, Katonah-Lewisboro’s instructional costs per pupil were $14,430 and its employee benefits were $7,053. The district’s employee benefit cost per pupil was the highest among the five districts and its instructional cost per pupil was the third highest in the group. Scarsdale spent the most on instruction per pupil ($15,379) but the second-lowest in employee benefits at $5,181 per pupil (see box).

What contributed to the district’s higher-than-average benefit spending? A closer look reveals that hospitalization/medical/dental insurance, which are among the items in the benefit package, cost the district $3,739 on a per-pupil basis, more than any of the other districts in the comparison group. Runner-up in high insurance premiums on a cost-per-student basis was Bedford, paying $3,536.

The Katonah-Lewisboro school board has hired a consultant to provide additional research on the specific category of benefits.

The committee also studied Katonah-Lewisboro salary levels compared to the peer group districts. The district ranked second-highest, at an average of $112,000 (Scarsdale was first at $115,700), out of the six comparison districts, and 3.6 percent above the group average. The committee concluded that not only are higher salaries likely to be contributing to higher instructional costs but also to higher benefit costs, which are a factor of salaries, such as retirement system, Social Security and Workman’s Compensation expenses.

In the categories of general support expenses, Katonah-Lewisboro’s costs per pupil were $3,081, the third-lowest in the group. Debt service for the district cost $1,591 per pupil, below the average of the group.

The report also seeks to put per-pupil spending into perspective. The Katonah-Lewisboro School District spent a significant amount of its total budget on transportation, not surprising in light of the fact that the district covers 55 square miles of territory. Out of a total expenditure of nearly $106.5 million in 2010-11, the district spent over $6.9 million on transportation, the second-highest transportation budget in the group. Bedford, which spent over $113 million overall that year, had the biggest transportation bill, at over $8.3 million.

What does all this mean in terms of affordability for district residents? The report found that the adjusted gross income per pupil of Katonah-Lewisboro residents is less than that of the other comparable districts, while the true value tax rate per every $1,000 of assessed property is higher than that of all comparable districts. Katonah-Lewisboro residents pay approximately $52 of school taxes for every $1,000 of income earned.

In the meantime, the value of real estate in the district is less than that of all the other comparative districts: an average of $263 per square foot, compared to an average of $337 for the group (Scarsdale was highest, at $436 per square foot). Growth in real estate values since 2001 has also been slowest in the Katonah-Lewisboro district. The average sales price for the group rose 25 percent from 2001-2010, but only 3 percent in Katonah-Lewisboro.

In light of the grim economic picture and grimmer real estate values, it’s not surprising that Katonah-Lewisboro voters are chafing at school budget increases. Despite having the lowest average annual budget increase of the peer district group, at 1 percent per year, Katonah-Lewisboro had the lowest budget approval rate of all the districts in the group. An analysis of school budget approval rates, averaging the years 2009-20011, showed that Katonah-Lewisboro had an approval rate of 59 percent, compared to an average for the group of 66 percent. Scarsdale residents faced a budget increase of 2.5 percent over those years, but 73 percent of voters approved the budget.

The trustees noted that residents often ask them why they don’t negotiate harder to keep salaries and benefits down. But the district’s flexibility and clout is limited by law.

“It’s going to be very important for the board to think hard about what next year’s finance committee’s charge will be in respect to this analysis,” said Mr. Gordon. But, he concluded, “If there’s blame to be had, the blame lies 100 miles north of here. The blame lies in Albany, with a law that makes every collective bargaining agreement indestructible. It’s driven by salary and benefits, and at the end of the day, we go into that negotiating room, and if the folks on the other side of the table don’t like what we’re presenting, they can get up and leave and their salaries and benefits stay exactly what they are. We’re the only state in the country that has such a law.”



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June 8, 2012

Katonah-Lewisboro cost per pupil outpaces peer districts