Health fund deficit shrinks
School system ends fiscal year with deficit of $37 million, below predictions
The Howard County School System said Wednesday thata it will report a $37 million health care fund deficit for the close of the 2017-2018 fiscal year, $13.5 million less than what had been projected.
The deficit, rooted in an imbalance of the school system’s employee health and dental fund that has been depleted since 2011 as money was used to pay for other uses, was projected to balloon to more than $50 million by the summer.
“This is huge, [the] first time in many years that [the school system] will not contribute further to the deficit,” Superintendent Michael Martirano said Wednesday. But, he said, the system still has “miles to go before we are at zero.”
Under its self-insured system, Howard County Schools pays for 85 percent of each employee’s health care claims, including employees’ and retirees’ health insurance, life insurance and voluntary benefits; employees cover the other 15 percent. For seven years, the school system was pulling funds from its health care budget to pay for major expenses, including a countywide prekindergarten program and salary increases.
Officials said the $13.5 million reduction in the deficit is the net result of a strategy combining efficient management, cost savings initiatives and collaboration with medical vendors to provide better health care without additional costs.
Significant cuts to the 2019 fiscal year school system budget and additional funding from County Executive Allan Kittleman and County Council were also needed to be able to pay out the health care budget in the current fiscal year.
The school board reduced the operating expenses for fiscal year 2019 by $19 million, and Kittleman recommended an $11 million, one-time payment to start reducing the health fund’s red ink. The County Council approved the payment for the fiscal year 2019 operating budget in May.
By fully funding the health care budget of $138.4 million, the structural imbalance of the fund will be eliminated and the deficit will be capped, according to the school system.
Talbott Springs proposal In other school system news, Martirano is seeking to move ahead with a proposal to fund a new Talbott Springs Elementary School despite state school planners challenging the need for a new building.
In his capital budget proposal released earlier this month, the superintendent has requested nearly $33 million over three years for a replacement school in Columbia; part of his overall $938 million, 10-year master plan for major construction projects.
See FUND, page 7
The deficit, rooted in an imbalance of the school system’s employee health and dental fund that has been depleted since 2011 as money was used to pay for other uses, was projected to balloon to more than $50 million by the summer.
“This is huge, [the] first time in many years that [the school system] will not contribute further to the deficit,” Superintendent Michael Martirano said Wednesday. But, he said, the system still has “miles to go before we are at zero.”
Under its self-insured system, Howard County Schools pays for 85 percent of each employee’s health care claims, including employees’ and retirees’ health insurance, life insurance and voluntary benefits; employees cover the other 15 percent. For seven years, the school system was pulling funds from its health care budget to pay for major expenses, including a countywide prekindergarten program and salary increases.
Officials said the $13.5 million reduction in the deficit is the net result of a strategy combining efficient management, cost savings initiatives and collaboration with medical vendors to provide better health care without additional costs.
Significant cuts to the 2019 fiscal year school system budget and additional funding from County Executive Allan Kittleman and County Council were also needed to be able to pay out the health care budget in the current fiscal year.
The school board reduced the operating expenses for fiscal year 2019 by $19 million, and Kittleman recommended an $11 million, one-time payment to start reducing the health fund’s red ink. The County Council approved the payment for the fiscal year 2019 operating budget in May.
By fully funding the health care budget of $138.4 million, the structural imbalance of the fund will be eliminated and the deficit will be capped, according to the school system.
Talbott Springs proposal In other school system news, Martirano is seeking to move ahead with a proposal to fund a new Talbott Springs Elementary School despite state school planners challenging the need for a new building.
In his capital budget proposal released earlier this month, the superintendent has requested nearly $33 million over three years for a replacement school in Columbia; part of his overall $938 million, 10-year master plan for major construction projects.
See FUND, page 7
PREVIOUS ARTICLE
