NIAGARA FALLS – The cost of health care for retirees of the Niagara Falls School District may go up as much as $2.5 million next school year, the School Board learned earlier this month.
And that’s not the only significant increase in spending foreseen in the 2015-16 budget, as overall costs are projected to rise by about $6.3 million.
Health insurance costs for existing employees are expected to rise by almost $600,000, and salary increases across the district will account for at least $1.6 million in additional costs, said Joe Giarizzo, the district’s administrator for school business services.
These figures were presented as a part of preliminary projections for the Falls’ spending plan for the coming school year. Superintendent Cynthia A. Bianco is scheduled to present her recommended budget to the board March 19.
Giarizzo said the increase in cost for retiree health insurance from BlueCross BlueShield was “outrageously more expensive” than expected.
The prior annual cost for retiree health insurance was about $3.6 million, and the new rates went into effect in January, in the middle of the school year.
“It is creating a significant issue not only for our budget for next year,” Giarizzo said, “it’s creating a significant issue for our budget for this year.”
The district provides individual or family coverage for 582 retirees age 65 and over, and another 160 between ages 55 and 64, Bianco said.
But health insurance isn’t the only cost increase facing the district.
The district expects to have a larger than usual number of teachers reaching the highest salary step, which teachers reach for being on the tenure track for 17 years.
A teacher’s base salary rises by roughly $23,000 between their 16th and 17th years under the existing teachers’ contract, which expires June 30.
Normally, the district sees between 20 and 25 teachers reach this step in any given budget year, but in 2015-16 there are expected to be 47 teachers reaching the top step, Giarizzo said. Next year, the increase is expected to cost almost $1.4 million.
The district and the teachers’ union also are in the process of negotiating a new contract, which would impact next year’s budget if it includes any salary increases.
Bianco said one issue remains in negotiations, but would not discuss specifics.
“We’re near a conclusion,” the superintendent said.
In addition to health insurance and salaries, other expected cost increases include an additional $66,500 for pension benefits and a $300,000 increase in the district’s busing contract.
The total budget for this school year is $126.4 million, and with the projected increases, total spending at this stage is projected at $132.7 million.
Last month, school officials presented preliminary projections for revenue for the coming year. Even though the state hasn’t released any aid figures, the Falls projected a 6.3 percent hike in state aid, which officials said was based on historical aid figures.
School officials aren’t sure when they’ll receive officials budget figures from the state.
The early estimate for total revenue anticipated by the district is $130.2 million, which would leave a $2.5 million budget gap.
School Board President Russell J. Petrozzi told his colleagues to prepare for an extra meeting or two in the coming months to deal with the budget.
The School Board is tentatively scheduled to adopt a budget March 26.
The budget vote and School Board elections are scheduled for May 19.
When the board meets on March 12, members will be given a presentation by the administration about various options to bridge the budget gap.