BEVERLY — Mayor Bill Scanlon last night offered to give the schools $100,000 from the city's free cash account to alleviate the School Department's $415,000 budget deficit.
Following a presentation by Superintendent Marie Galinski to the City Council outlining the deficit, Scanlon said the money would cover the school's projected $100,000 overrun for the unemployment costs of laid-off school employees.
"I have sympathy for the superintendent," Scanlon said. "She inherited a situation not of her making."
Galinski, who took over as superintendent last July, told city councilors that the schools are on track to overspend their budget by $415,000 only halfway through the fiscal year.
Galinski cited a $200,000 projected deficit in special education costs, a $115,000 shortfall in school choice revenue and a $100,000 deficit in unemployment costs.
Scanlon, however, said he believes that gap can be closed once the city's finance director, John Dunn, meets with the school's new finance director, Jean Sherburne, to go over the budget more closely.
"We changed the superintendent and the business manager in a short period of time," Scanlon said. "We'll get back to you at the next meeting and hopefully will have a lot of this solved."
Galinski said special education costs have soared due in part to 17 students who require out-of-district placements that the School Department was not expecting. Those placements can cost the schools anywhere from $26,000 to $223,000 per student, she said.
The costs have been exacerbated by a cut in the state reimbursement rate for special education costs from 72 to 38 percent, a reduction in revenue for Beverly of about $1 million, Galinski said.
Galinski said Beverly has nearly 1,000 students receiving special education, most of them in the Beverly schools. School Committee President Annemarie Cesa told councilors that the schools are "legally and morally" required to provide an education for special ed students.
"When you hear about special education, you need to realize these are Beverly children," she said.
Galinski said school choice revenue is down because Beverly has limited space at the new high school to accept out-of-town students. School choice is the program that allows public school students to attend schools outside their districts, with the host school getting state money for each incoming student.
The School Committee limits the number of out-of-town students to 10 per grade. City Council President Mike Cahill asked if that number can be increased, but Cesa said that would mean larger class sizes.
"We're not going to increase our class size to increase our revenue," Cesa said.
Galinski said only 80 Beverly students have chosen to attend other public schools, the lowest number since 1993. That saves money on the city side of the budget in terms of outgoing tuition costs, but not in the school budget, she said.
Unemployment costs are on the rise because of the layoffs in the School Department in the last few years, Galinski said. Laid-off workers can also now collect unemployment for 99 weeks, up from 32. The average payout to laid-off school workers has doubled from $18,000 to $36,000 per year, she said.
Galinski said the schools' overall budget has remained about the same over the last five years. She said they have cut costs by closing two schools and cutting positions that have led to increased class sizes, fewer electives and more study halls. The schools have also cut 15 administrative positions since 2001, she said.
Galinski said the schools have operated under a budget freeze since October. She said she would like to avoid midyear layoffs, but that is one of the options.
"The middle of the year is not a good time to make staff reductions when you have programs in place and students in classrooms," she said.
The City Council would need to approve any additional appropriation to the schools. They were not asked to take any action last night. Scanlon said he will bring up the subject at the council's next meeting, Feb. 7.
Staff writer Paul Leighton can be reached at 978-338-2675 or pleighton@salemnews.com.
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