When negotiating union contracts, is it damaging to maintain a fund balance?
A . No. While it may appear to be a problem, a fact-finding report (November 1991) stated, “A school board should not be penalized for efficiency in operation and the development of a strong financial position by being required to grant wage increases in excess of other districts that are not as fortunate. Taxpayer money does not have to be spent just because it is available.” A final observation: In a 1991 survey, PSBA also asked school districts what percentage of their annual budgets the postponed June 3, 1991, basic subsidy payments represented. Of the nearly 200 districts responding, the average was 4.6%. Said another way, most school districts would not have been able to cover expenses normally paid by the delayed June subsidy payments if fund balances of less than 5% had been in effect.
