NEWS RELEASE: January 20, 2010

School Board Reviews 2010-2011 Preliminary Budget
$111.4 million spending plan calls for 2.9 percent tax hike

PERKASIE, Pa. -- Thanks to conservative budgeting by the administration and prudent decisions by the school board over the years, the Pennridge School District is in better financial condition than many other area districts.

That much was evident last night when the school board got its first look at the 2010-2011 budget that maintains a high-quality educational program while requiring only a modest tax increase. Other area districts are faced with more significant tax hikes and/or program and staff cuts.

"We're in this position because of wise decisions this board has made over time," Business Administrator Bob Reinhart said in beginning his presentation to the board's Finance Committee.

Reinhart went on to outline a $111.4 million spending plan that is 2.13 percent higher than the current budget. It would increase the property tax rate from 119.55 mills to 123.02 mills, a 2.9 percent increase, and hike the property tax for the owner of a property assessed at $30,400 by $105, from $3,634 to $3,739.

On the revenue side, the district is coping with significant declines in interim real estate taxes and real estate transfer taxes because of a slowdown in construction and property sales. Assessment appeals, based on declining property values, have also taken a toll. State and federal subsidies are expected to stay flat.

One unknown revenue item is the district's share of state gaming funds. Last year, eligible property owners received homestead assessment reduction that equaled a tax savings of $205. That same reduction has already been factored into this year's calculations. If gaming revenue produces as assessment reduction that produces more than a $205 savings, the average school tax bill will go down. If the assessment reduction is less, the average district tax bill will go up.

On the appropriations side, the district will see a $690,856 increase in its retirement contribution. However, that number could have been nearly three time bigger had the board not decided to keep its contribution at 7.13 percent of payroll in previous years, rather than the 4.78 percent allowed by the state. With the rate going up to 8.22 percent for 2010-2011, the district could have been looking at a $1.9 million increase.

Reinhart warned of a looming pension crisis as the district's contribution is scheduled to eventually increase to 33.95 percent of payroll in 2014-2015 and stay there indefinitely.

The good news on the expense side of the budget is that healthcare costs are expected to stay level for the third year in a row and utility expenses are expected to be reduced by $387,000, thanks to an aggressive energy conservation effort across district facilities.

This year's budget deliberations began later than usual because the board directed the administration to present the preliminary budget with a real estate tax increase at or below the 2.9 percent cap allowed by the state. Having done that, Superintendent Dr. Robert Kish asked the board not to impose further cuts that would impact class size or programs.

"This is our second difficult budget in a row," said Dr. Kish. "Last year, we cut a great many areas. The opportunity to make further reductions isn't there because we did it last year."

However, if the board insists on reducing the budget further, Dr. Kish outlined deeper cuts that were considered by the administration but rejected because they would adversely affect programs or class size. Some of those reductions included:

• eliminating late bus runs;
• bussing all first and second graders;
• increasing walking distances for some students;
• changes to the elementary music program;
• eliminating/reducing the Work for Education program that helps transitional students enter the workplace;
• increasing class size in grades 1-3 by one student (could save six staff positions); and
• increasing some high school classes by two students.

As it is, the proposed budget will eliminate the Supervisor of Guidance and Supervisor of Gifted positions. A coordinator will oversee the guidance department while Deb Brady will provide oversight to the Gifted Program in addition to her duties as Deibler Elementary School Principal.

Because of projected enrollment reductions at the high school, two staff positions will be eliminated.

Bedminster parent Becky Schlotter, who attended the meeting, asked the board to balance the needs of students with the desire for fiscal restraint.

"We need to protect the future of our kids," said Schlotter. "At the same time, a lot of people in the community are hurting. Remember them, too."

The board will meet again January 25 to approve a resolution affirming its plan to keep the tax increase at or below the cap. Another meeting is scheduled for February to look at the budget in more detail.

CONTACT: Joe Ferry, Public Information Officer, 267.772.0740