SHELTON — City Finance Director Paul Hiller says school health insurance spending is on track to lead to a deficit of more than $3 million in the first two months of this school year alone.
Figures from July to August show the school board has already spent $2.8 million into its account, with a budget of $8.1 million for the 2023-24 school year. Projecting that number over a 12-month period results in estimated spending of about $11 million, Hiller said.
“Current trends for the first two months, July and August, are significantly higher than last year’s numbers, indicating that a deficit larger than last year is likely,” Hiller said. Ta.
The update, presented at Wednesday’s school board finance subcommittee meeting, comes just weeks after the school board discovered it overspent on health care last year by $2.6 million.
School Finance Director Todd Heffelfinger said health insurance costs increased 23.9% in July and August from the same period last year.
In total, the district is spending an average of $260,000 a month more than budgeted, Heffelfinger said, and if the trend continues over the next 10 months, it would be $3.1 million overspent.
The school board, school administrators and Mayor Mark Lauretti are scheduled to meet Oct. 19 to discuss the projections.
While everyone agreed that number could decline, board member Diana Meyer had a more dire prediction.
“The city’s budget for next year is only $7.9 million to cover the rest,” Meyer said. “My concern is that the city will have to shoulder a significant burden to cover the medical cost overrun. The city, and ultimately the taxpayers, will have to shoulder the excess. This is the second consecutive year.”
Meyer said the health insurance deficit could reach $4 million or $5 million. Looking at these numbers, she is concerned about how this will be covered. If the burden falls back on the school board, there is only one option: cut staff.
The city still faces a school board deficit for the 2022-23 school year, estimated at nearly $2.8 million, according to figures released last month by the City Finance Department.
The school’s budget deficit was expected to be around $1.4 million more. Because of this significant discrepancy, the city brought in an auditor, David Cappelletti of Clemont & Associates LLC, to examine the school district’s books.
Although the audit results are still incomplete, Hiller said information received from auditors suggests the school board’s deficit could be reduced by up to $1 million. That report is expected in December.