Currently there are 127 school districts that are not allowed to count their retired teachers health insurance toward meeting their Chapter 70 net school spending requirements, because that expense was not included in their requirements in FY’94, the first year of implementation of the Education Reform Act of 1993. I was curious how many of those 127 were in the same predicament as Lynn. As you know, Lynn's school and city officials make it seem as though there are many. I contacted the DESE again for more information and discovered there are actually only two other districts, Methuen and Palmer facing a similar situation as Lynn. Although, neither of these has a shortage nearly as great as Lynn's. I believe Methuen's FY15 shortage is $5.2 million and Palmer's is $722,000. Lynn's as we all know is $18.5 million.
Many of the 127 districts, including Lynn, were not separating out the retired teacher health insurance costs and reporting them on a separate line. However, with the exception of Lynn, Palmer and Methuen, where it is known that they were actually including these costs in with active insurance, the department does not known whether these costs were being included in with active insurance or being reported at all.
When prompted by the department to separate out these costs, the separation did not result in a shortage (at least not a shortage below the 95%) for districts, except Lynn, Palmer and Methuen, which is why these three districts are facing penalties. To my knowledge, a decision has not been made yet as to whether the commissioner will waive any of the penalties associated with deficiencies attributed to non-inclusion of these costs.
Many of the 127 districts, including Lynn, were not separating out the retired teacher health insurance costs and reporting them on a separate line. However, with the exception of Lynn, Palmer and Methuen, where it is known that they were actually including these costs in with active insurance, the department does not known whether these costs were being included in with active insurance or being reported at all.
When prompted by the department to separate out these costs, the separation did not result in a shortage (at least not a shortage below the 95%) for districts, except Lynn, Palmer and Methuen, which is why these three districts are facing penalties. To my knowledge, a decision has not been made yet as to whether the commissioner will waive any of the penalties associated with deficiencies attributed to non-inclusion of these costs.
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