published Thursday, May 7th, 2009

Hamilton County: School budget questioned

by Kelli Gauthier
  • photo
    Staff Photo by John Rawlston Hamilton County Schools financial officer Tommy Kranz presents the system's school budget proposal to the Hamilton County Commission on Tuesday. Commissioners include, from left, John Allen Brooks, Bill Hullander, and Fred Skillern.
Audio clip

Hamilton County Commission Budget Hearings, May 6, 2009

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As Hamilton County commissioners on Wednesday got their first crack at the public school system’s budget, they echoed a concern voiced many times recently: health insurance costs.

Hamilton County Schools’ leaders estimate health costs will increase by nearly $5 million for fiscal year 2010, which represents the largest budget item increase.

While Chief Financial Officer Tommy Kranz stated “for the record” Wednesday that the school system had been negotiating with the Hamilton County Education Association over changes, so far nothing has changed.

“The administration has identified this is an area that clearly cannot continue like this,” he said. “I can assure you, this is a top priority.”

Several commissioners offered suggestions for cost savings.

Dr. Richard Casavant said it only made sense to charge higher insurance premiums for smokers over nonsmokers, a move Mr. Kranz said school system officials have considered.

Commissioner Larry Henry asked why the school system offers two health plans, a preferred-provider organization through Blue- Cross BlueShield of Tennessee and a health maintenance organization through Cigna.

Mr. Kranz said one proposal he submitted to the teachers’ union would combine both plans into one health care carrier, which he said has “large savings potential.”

Commissioner Fred Skillern was the most critical of Mr. Kranz’s budget presentation, saying it does not fix the system’s problem of expenses growing faster than revenues.

For instance, some savings the district saw from replacing well-paid retirees with younger, lower-paid staff would be eaten up because the new staff still will receive step pay increases, whereas older employees already would have maxed out in that category.

“When are you all going to get to the point where your expenses equal your revenues?” Mr. Skillern asked, raising his voice slightly. “This Chinese arithmetic will eventually catch up with you.”

Near the end of Wednesday’s budget hearing, County Mayor Claude Ramsey told Mr. Kranz that he likely would have the commission approve a continuation budget for the school system. If approved, Hamilton County Schools would operate under the budget for fiscal 2009 and could not spend any more money.

Mr. Kranz said he was concerned the district would be unable to pay for employees’ step salary increases on July 1 as it normally would. It also wouldn’t be able to hire more staff for the new East Hamilton School, scheduled to open in August, he said.

But Mayor Ramsey said because the county now is in an appraisal year, the continuation budget “will likely be a reality.”

County officials are hearing appeals on property appraisals, and as an appraisal must be revenue neutral, the actual rate may change after appeals, finance director Louis Wright said.

If the rate changes, that will affect revenue the county — and subsequently the school system — receives on new property.

Appraisals should be finished by August, when Mr. Wright said he expected the commission to vote on the school system’s fiscal year 2010 budget.

about Kelli Gauthier...

Kelli Gauthier covers K-12 education in Hamilton County for the Times Free Press. She started at the paper as an intern in 2006, crisscrossing the region writing feature stories from Pikeville, Tenn., to Lafayette, Ga. She also covered crime and courts before taking over the education beat in 2007. A native of Frederick, Md., Kelli came south to attend Southern Adventist University in Collegedale, where she earned a bachelor’s degree in print journalism. Before newspapers, ...

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