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Sunday, May 4, 2014

LETTERS TO LORI

Dear Ms. D’Amico

You have asked for information pertaining to the Lynn school district’s reporting of retired teachers’ health insurance.  I will attempt to address your questions as best I can.

Schedule 19 of the FY92 End of Year Pupil and Financial Report showed the budget for the Lynn Public Schools in FY93.  This FY93 budget was the basis for FY94 Chapter 70 net school spending requirement.  The Department currently possesses no end of year reports for FY92.  A copy of this report was mostly likely sent to the State archives, but even determining this would require an incredibly time-consuming search.  

Regardless of whether we can locate this report, schedule 19 for FY93 does not contain a separate line for districts to report retired teachers’ health insurance.  Had a district in FY93 nevertheless included that budgeted amount on its schedule 19 report, the District would have included the figure on lines 7060 and 7250, in the broad category: employee benefits (function 5100).  I’ve attached a .pdf file showing a blank template of schedule 19 from the FY92 report.  As you can see, acquiring Lynn’s FY92 end of year report would not necessarily contain the specific information you are looking for.  

Sometime after the submission of FY 92 end of year reports (perhaps in the Winter of 1995), Department staff surveyed school districts to determine whether retired teachers health insurance had been included on schedule 19 for FY93.  In response to this survey, Steve Upton, the business administrator for the Lynn Public Schools, wrote a letter to then-Commissioner Antonucci indicating that Lynn did not include this cost in its end of year financial reports.  A copy of this letter, dated March 1, 1995, is also attached to this letter, and the Department relies on this letter as evidence that Lynn excluded from its net school spending reports health insurance costs for retired employees. 

As I understand it, at around this time, the Massachusetts Legislature was considering a proposal to permit districts to recalculate their net school spending requirements by incorporating retired teachers health insurance costs.  This proposal did not pass.

Ultimately, aside from the attached letter, the Department possesses no record that documents or “states or proves Lynn did not meet the net school spending requirement for including retired teachers health insurance towards net school spending.”  Based on the Department’s survey, 127 districts including Lynn excluded retired teachers’ health insurance from their report of net school expenditures on the FY93 schedule 19.  Beginning in FY95, the Department began to track more closely on a separate line the costs associated with retired teachers’ health insurance, but, according to the terms of the state budget, still did not factor the health insurance costs into net-school spending calculations for these 127 districts.

I hope that this response addresses your questions.

Roger Hatch, Administrator
Office of School Finance
Mass. Dept. of Elementary and Secondary Education

Josh Varon
Legal Counsel
MA Dept. of Elem. and Sec. Ed

6 comments:

  1. And that time,you wasted on their clocks...it served what purpose??? Oh I forgot you don't pay taxes so it is not your money

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    1. I am the one who doesn't work. Blame me!

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    2. I am not sure what you were trying to say with your comment, or whose clocks you were referring to, but the purpose it served was to have the facts regarding this matter. Those facts are that the DESE does not possess any end of year reports for FY92 for Lynn and they are relying solely on the March 1 letter from Mr. Upton as evidence that Lynn did not include health care costs for retired teachers in their net school spending. The DESE believes Lynn should not have been including these costs, but a recent audit discovered they were. As a result, Lynn is facing a penalty of more than $7 million. According to Mayor Kennedy, all of this may lead to possible city layoffs in departments such as the police, fire and DPW. As far as taxes go, I can assure you, I most definitely do pay taxes.

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    3. Sorry Lori, the 7+ is principle as I understand it which is DIFFERENT than the penalty which may be waived and is considerably LE$$. The defecit ain't going no where.

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    4. By penalty, I mean reduction in aid. According to the letter sent to Dr. Latham by Commissioner Chester, "If actual FY14 spending were to match the amounts reported on this year's Schedule 19, then there would be an $8,688,609 carryover into FY14. There would be a Chapter 70 aid reduction of $7,030,507 in FY15 based on the FY14 spending."

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    5. Well I'm not reading too well these days, my cataracts and all, the point I was trying to get across is that I wouldn't be counting on no state legislative solution to all our problems.

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