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Shippensburg Area School District officials and board members reviewed the preliminary school budget in light of Gov. Tom Corbett's proposed budget and found the district faces at least $561,000 in cuts.

Business Manager Deborah Westover said that if the General Assembly passes Corbett's budget as written, various categories of school funding would be merged into one budget item. Funding then would no longer be based on a district's actual expenses but on an allocation basis.

The difference, Westover said, is that if expenses that used to be reimbursed based on cost go up, the state won't have to increase the allocation, because it isn't based on numbers from the district.

No recovery

Assistant Superintendent Beth Bender said that if a developer built a lot of new houses bought by families, resulting in increased transportation costs for a district, under former budgets the transportation funding would be adjusted, because the district's numbers would reflect the change.

Under the new system, transportation funding is rolled into a Student Achievement Education Block Grant that is not based on specific metrics, so the state doesn't incur an obligation to help with those additional transportation costs.

Under the allocation system, Bender said, "You can't recover those funds."

Superintendent Kris Carroll said that a similar change was to special education funding in 2008. Since then, the district's special ed funding has not reflected the cost of providing special education services.

"That's what's really hurting us in the area of special education," Carroll said.

Special ed funding for Shippensburg will not increase next year. It's been level for about four years, Westover said.

Combined funds

Board member Marlyn Reed asked how the Pennsylvania Department of Education would be measuring school achievement, since the state funding is now called the Student Achievement Education Block Grant.

"I don't believe it has anything to do with student achievement," Westover said. "It is the new name for the funding."

The new grants will combine four categories of funding.

First is Basic Education Funding, which Westover said is just about level with 2011-12 funding.

Second is Social Security, which was based on the cost of operations and reimbursed districts for part of the Social Security taxes paid to the federal government on wage. The reimbursement rate had been 50 percent.

Third is regular transportation, a reimbursement based on the cost of operating buses.

Fourth is nonpublic transportation, which covers the cost of such services as transporting a student to a special education class in a different building or outside the district.

Other factors

Westover said she is hoping health insurance rates for next year will come in without a significant increase.

The board is also working to refinance some debt, and there might be a savings of as much as $100,000 if interest rates are favorable when the bonds are auctioned in late March.

Board member Don Hilbinger, who serves on the vo-tech's Joint Operating Committee, said the Franklin County Career and Technology Center budget is expected to be about the same for 2012-13, but that individual districts may pay more or less depending on the number of students they send for vocational training.

Board member Duane Burt asked about the increase in cost of salary and benefits from year to year. Hilbinger said the difference is 6.6 percent.

"I'm very confident our increase in revenue is far below 6.6 percent, and therein lies the problem," Burt said.

The board took no action on the budget and did not discuss specific cuts at Thursday's committee meeting. The next full board meeting will be at 7:30 p.m. Monday, Feb. 27, in the Shippensburg Area Middle School cafeteria.