Depleted Insurance Fund Spurs $2.1 Million Increase in Region 4 School Budget

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ESSEX/DEEP RIVER/CHESTER — The amount allocated by Region 4 member towns to a health insurance fund for employees will likely increase by 18 percent, or $2.1 million, in the 2020-21 school budget.

The increase comes after several years when the regional school district depleted the reserve due to a combination of increased medical expenses and a decrease in funding allocated to the account.

Across all four school districts in the region and the Supervision Committee, the proposed increase to the budget item will grow from $6.5 million to $8.6 million.

“Right now, given the claim history we need to build that reserve back up which is why the administration is recommending an 18 percent increase across the budgets,” said Lon Seidman, the chair of the Essex Board of Education and member of the Supervision Committee.

“Right now, given the claim history we need to build that reserve back up which is why the administration is recommending an 18 percent increase across the budgets,” said Lon Seidman, the chair of the Essex Board of Education and member of the Supervision Committee. “This is on the high end of the estimate, but should allow us to begin building up a healthier reserve amount.”

Chip Ward, the former business manager for West Hartford Public Schools and a consultant for Region 4, and Joe Spurgeon, the district’s medical insurance representative from Lindberg & Ripple, estimate the claims for 2020-2021 will total between $7.33 to $7.6 million.

Based on the claims submitted so far in 2019-2020, the current year’s expenses are likely to exceed the previous budget estimate, requiring the district to further draw down the existing reserve fund. To compensate, Ward and Spurgeon recommended increasing the amount budgeted for medical insurance by 14.3 to 18.1 percent.

That increase will still have to be apportioned and budgeted by the 5 member boards making up the Region 4 School District.

“My concern with supervision committee decisions is that the public never sees it,” said Virginia Carmany, the chair of the Chester Board of Finance. “Each town approves their individual elementary school’s budget and Region 4 goes to referendum, but the supervision amount is baked into the cake already.”

“I’m not sure what the overall impact will be across each budget but we are in the process of going through first drafts of the budgets over the next couple of weeks. Supervision settled at around 2.7 percent last night so other efficiencies may cushion the impact depending on the individual budget, but we’ll have to see what each board gets presented in their workshops,” Seidman said.

A 2.7 percent increase in the supervision committee budget would entail an increase in spending from $7.71 million to $7.92 million.

“My concern with supervision committee decisions is that the public never sees it,” said Virginia Carmany, the chair of the Chester Board of Finance. “Each town approves their individual elementary school’s budget and Region 4 goes to referendum, but the supervision amount is baked into the cake already.”

These increases don’t exist in a vacuum, Carmany said. In the previous year the supervision budget grew to accomodate a 12.5 percent increase in salaries negotiated with the teachers union. This year taxpayers in the region will be asked to pay the additional cost of the medical insurance fund and the deficit incurred by the purchase of the Mislick property in 2018.

Last year in Chester, local taxes increased by 6.2 percent. Carmany said that 90 percent of that increase was due to a $650,000 jump in education costs for both the elementary and Region 4 schools.

“For them to have another increase this year is frustrating,” Carmany said.

At the same time as costs continue to rise, the student population in Region 4 is plummeting.

Over the last decade, the school budget increased by 31.6 percent (compared to a cumulative rate of inflation of 17.2% according to U.S. Department of Labor Bureau of Labor Statistics) and student enrollment decreased by 26.2 percent, or 547 students.

According to recent projections presented at the Board of Education, over the next three years enrollment will decline by another 200 students across the district.

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