Wednesday, December 15, 2010

Are School Taxes Going Up?

While Parkesburg Borough Council holds the line for the 3rd straight year on property taxes, judging from the notes on Octorara Report, it looks like the school district is again in the proverbial (red) financial corner and looking to raise taxes on district property owners.

Here are the notes from the 2011 - 2012 budget discussion that took place during Monday evening's board meeting:

A. Budget – Dan Carsley

The powerpoint presentation will be on the district website in the future.  I will hit some important points Mr. Carsley made during his presentation.

The budget process will include not only the 2011-12 school year, but future years to prepare for expected large expenditures (PSERS and healthcare in particular).

Mr. Carsley pointed out that "any Act 1 taxes not levied will be lost forever."  All school districts are mindful of this.

Some school districts in our area have lost assessment values equal to their Act 1 index - so they are starting their budgets in the red.

Increases in expenses above the Act 1 index will require equal reductions in other areas.

The budget for 2009-10 expected to use $712,000 of fund balance to balance.  The actual revenues & expenses were at breakeven. 

2009-10 Revenue Breakdown
Federal          6%
State             26%
Local           68%

Investment Income & Earned Income Tax were significantly lower than prior years.  EIT was approx. $2,000,000 in 2008-09 and was approx. $ 1,500,000 in 2009-10.  The budget for this year is about the same.

The Act 1 index for Octorara for 2010-11 is 1.8% (1.4% + adjustments )

Estimates for 2010-11 (differences from current budget)

Revenue differences
Real Estate Tax Revenue based on index         $  600,000  [more funds]
Basic Education (Fed portion)                          (  647,108) [less funds]
Federal Revenue                                               (  500,000) [less funds]

Net Revenue Change                                        $(548,108)  [less funds]                     

Expense Differences
Salaries                                                           $(478,099)  [spending more]
Benefits (Healthcare & Retirement)          (423,793)  [spending more]
Other Prof Services                                            249,003   [spending less]
Tuition (Charter schools)                                  (602,500) [spending more]
Capital Expeditures                                           (125,897) [spending more]
Debt Service                                                      (310,000) [spending more]

Net Expense Change                                     $ (1,691,286) [spending more]

Total Change                                                $ (2,239,394) [spending more]


This shows that we are starting with a $2,2 million deficit.

Preliminary Act 1 Exceptions are about $1 million.

Mr. Ganow asked if  there was any good news.

Mr. Hume had some questions about charter schools.  Mr. Carsley explained that the state will reimburse us up to 30% of charter school costs.  Last year we got about 25%.  We paid charter schools about $1.8 million last year.

Mr. McCarter wanted to know how a voucher system would impact our budget.  Dr. Newcome replied that it would depend on the specifics of the program.   There is no way to know until it is created.  He did note that if no new money is put into the state pot, then we would get less money if people took advantage of it.

Mr. Carsley said that the Basic Education budget could go down to the 2007-08 levels.

Mr. Norris asked about the multi-year budget.  He was looking for information specific to the fund balance. Mr. Carsley didn't have the file with him.  He explained that the model uses the base index and some basic assumptions.  It shows that if nothing changes with funding other than the index & using conservative increases in spending, we would be out of money in 3 years.

Mr. Hume asked some questions about the State Tax Equalization Board.

Mr. Malone asked for a timeline.  Mr. Carsley said that the budget would be advertised Jan. 7, 2011.  The preliminary budget needs to be approved Jan. 17th.

Dr. Newcome said that the Administration has been working on expenses.

The Finance Committee is looking at ways to inform the public.  They are looking at a special meeting for the public with Mr. Carsley presenting.  There is also the possibility of some town hall type meetings.

Mr.Carsley will have the model at the next meeting.

Mr. McCarter asked what effect House Bill 2497 had.   (This was the PSERS bill).  Mr. Carsley stated that it just "kicks the can down the road."

You get find a review of the entire meeting here.

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