Cinfici Helps Balance the Reading School District Budget to Avert a State Takeover

           Since I was sworn in as Reading School Director on May 8 to fill a vacancy on the Board of Directors, I have been preoccupied with the passage of a balanced budget for the Reading School District.  I am sorry that I was unable to post more frequently during this time, as the process required my intense focus to close a $13 million shortfall without raising taxes.

           I am pleased that although I did not agree with all of the provisions within the District’s budget for fiscal year 2013-2014 that begins July 1, the Board was able to pass a balanced budget of over $212 million on Friday, June 28, before the legal deadline of today.  The failure to pass a balanced budget on time would have resulted in the state declaring the District, which is already in distressed watch status, as a distressed school district, which would have allowed the state to dictate its finances totally through a financial recovery officer or receiver.  Although a state takeover would likely have resulted in better fiscal responsibility, the principal of local control would have been lost and local input of the spending of locally-raised tax dollars thereby nullified. The District would also have been financially stigmatized with an even lower credit rating and its prospects of ever recovering and permanently exiting distressed status bleak.  I believed that as long as local control existed, the Board must exercise its fiduciary responsibility to pass a fiscally-responsible budget.  I am pleased that the Board appears to have achieved this goal.

           The Reading School District Administration had presented a plan immediately after my swearing in to close a projected budget deficit of over $13 million dollars that included the highest real estate tax increase allowable by law for the second consecutive year, without building up any significant budgetary reserve. Some of its plans did not appear to the Board of Directors to be well considered while many other initiatives to save money or increase revenue were left on the shelf as not ready. The Board exercised its fiduciary responsibility by exemplifying the value of local control by working its way through the Administration’s proposals to cut student programs or services, taking out what we thought too damaging to students or that was too impracticable or inefficient for our particular district by offsetting them with our own proposed cuts, without raising taxes and by placing $2.5 million in budgetary reserve.

           I am proud to have helped assist the District at this critical time. I noted to the Board, however, that its work is not done, as additional savings and increased revenue (other than by raising taxes) are necessary to build up the budgetary reserve to the recommended level of $10 million, as the District likely will need to use at least some of it because of certain foreseen anticipated expenses or losses of revenue or because of unforeseen contingencies.  I am eager to begin to promote various ideas for additional savings and increased revenue.

           In the meantime, I look forward to a break in the meeting schedule and possibly being able to post more frequently.