JEFFERSON TWP — Knoch School District is projecting a $940,000 budget deficit for the 2024-25 school year due, in large part, to a nearly half a million dollar increase in health insurance payments.

Business manager Jamie Van Lenten told school board directors at a meeting Wednesday, April 10 that the district’s expenditures have increased by $1.1 million compared to last year.

Part of that increase, Van Lenten said, is a 13.68% increase in insurance payments to the health care consortium, known as the Midwest Health Combine, which the district is a member of.

The projected deficit is not connected to ongoing construction project at Knoch High School, which is being paid for using a $32 million bond, she said.

Along with the bond, the district is adding about $2 million in the fund balance to go toward the project, Van Lenten said.

“We worked really, really hard to create project that kept us at a very low level financially,” Van Lenten said. “So that was only 4.5% of our budget.”

Rather, the $491,335 increase in health care, which makes is partly due to “unanticipated health care challenges,” Foley said.

Since the COVID-19 pandemic, Van Lenten said insurance claims went up.

That, coupled with Medicare funding decreases, premium rates and the price of prescription drugs not covered by insurance have contributed to insurance costs.

Other school districts in the consortium have also seen increases in insurance payments, she said.

When asked whether the district could leave the consortium, Van Lenten said expenses outside the public entity risk pool may be higher. The associated expenses with leaving the consortium could be $2 million or more, Foley said.

Van Lenten also reported other challenges related to district revenue and expenses, such as low enrollment, lack of growth in the district and “stagnant” state and local revenue, which she said increases by about 1% a year.

Van Lenten discussed a number of tentative strategies, including applying for additional grant funding, reviewing rental agreements for outside entities to use the district’s facilities, raising taxes based on a five-year plan and reviewing staffing proposals.

“Raising taxes is only a percent of a percent of our income,” Van Lenten said, as she discussed strategies.