Though the title is apropos for many school districts across PA, since they are all a part of PSERS where contribution rates to the pension system have been and are climbing (see page 23 of this report), but the Norwin School District in Westmoreland (and part of Allegheny) County is possibly looking to furlough employees due to what the president of the school board of directors stated is “… ‘mismanagement’ of the Pennsylvania State Employees Retirement System years ago”. With those contribution rates as described in the report above, Norwin’s expense for PSERS doubled from $3.0 million to $6.3 million from 2012-13 to 2014-15 based on its audit ending the 2014-15 school year.
That audit pointed out the shortcomings with Act 1 of 2006, the state’s funding scheme for K-12 districts, and PSERS funding. It noted in its section on “major financial issues” that
Further complicating the above situation is a projected substantial increase required for the funding of the state-wide school employees retirement system (PSERS). The defined benefit plan is projecting an increase in the employer contribution rate of approximately 63% by 2016-17. For the 15-16 fiscal year the rate is 26.84%. The impact of this type of increase on the District’s budget is approximately $1.9 million over the next three years.
The District will meet this challenge by reviewing its current staffing levels, future hiring needs, and spending practices to ensure we are maximizing resources and driving efficiencies when decisions are made. We will also look at increasing our current revenues and explore alternative funding sources.
Based on the District’s real estate tax rates, the millages for both the Allegheny and Westmoreland portions have increased from where they stood in 2014-15. Norwin is a low spender when compared to other districts on total expenditures per-pupil, with $11,867 in total expenditures compared to the state average of $15,854 that year. It is not clear where pension reform fits in as the state deliberates its 2017-18 fiscal year budget.
