Health care costs hit districts | SteamboatToday.com

Health care costs hit districts

Insurance expenses eating up bigger chunks of budget

Mike McCollum

— Divvying up the Steamboat Springs School District’s budget is more difficult as rising health insurance costs eat up more pieces of the pie each year, said Dale Mellor, the district’s director of finance.

Mellor is beginning the 2008-09 budget process without a firm sense of how much health insurance will cost the school district, but he is sure of one thing – insurance costs are skyrocketing. The school district’s insurance provider recently submitted a proposal to increase health insurance costs by 17 percent next year, which is more than the 11 percent annual increase incurred in recent years, Mellor said.

“We are currently going out to bid for health insurance because our current carrier is raising rates by 17 percent,” he said. “At a 17 percent increase, it would cost the district approximately $150,000.”

Mellor said anticipated enrollment increases could help offset extra insurance costs. The Colorado Department of Education uses final enrollment numbers as of Oct. 1 of each school year to determine how much funding each district receives per student, often referred to as per pupil operating revenue.

“We expect to receive more than $150,000 in increased finance formula funding, but obviously this would be $150,000 less that we would be able to spend on things like increasing salaries, as well as additional operating costs,” he said.

South Routt Superintendent Kelly Reed said he always takes a deep breath and crosses his fingers when health insurance estimates land on his desk. This year, Reed said he was able to breathe a sigh of relief.

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“It’s been rising at 18 percent the past few years, but this year it’s 7 percent,” he said. “Obviously it’s a significant difference – almost a third of what we’ve had the past few years, but it’s still a 7-percent increase.”

Reed stressed that insurance costs are a big financial hit to small school districts. To help offset rising insurance and operating costs, the South Routt School District asked voters to approve a mill levy override of three mills – a property tax increase above what state regulations allow – to generate an additional $360,000 a year.

“We are also hoping that an increase in enrollment will directly offset part, if not all of rising insurance costs,” he said.

After many years of single-digit insurance increases, Hayden Superintendent Mike Luppes said the ballooning insurance costs recently sustained by Steamboat and South Routt school districts have finally caught up to Hayden.

“Hayden is traditionally lower, but we are going up 21 percent next year, which is about $77,287,” Luppes told Hayden School Board members Wednesday.

– To reach Mike McCollum, call 871-4208

or e-mail mmccollum@steamboatpilot.com