Tax hike in EASD tentative budget

By on May 17, 2017

Tim Stayer

Ephrata Area School District residents could see a 3.1 percent increase in their taxes next year.

Their taxes could inch up by 0.63 percent of a mill if the district’s preliminary 2017-18 budget passes in June.

Board members unanimously passed the preliminary budget of $65,798,813 with a 3.1 percent increase Monday evening.

That percentage could decrease by the time the final budget gets passed in June, depending on a number of factors, according to Board President Timothy Stayer.

Top deciding factor would be having an inkling of what funding the state will give to the district.

Residents currently pay 20.45 mills and if the rate of 3.10 percent is approved, that will drive the millage to 21.08.

The 3.1 percent rate is the maximum allowable rate under Act One guidelines, and would bring in an extra $1,170,569 to the district.

A property owner with an assessed value of $140,968 is currently paying $2,882.80 in real estate taxes. If the 3.10 rate is approved, that figure would increase by about $89, said Stayer, who also chairs the financial committee.

The school board is still looking at some options for next year’s budget, Stayer told the board.

If the taxes increase by 2.75 percent or .56 mills to 21.01 mills, the same property’s taxes would increase by $78.94. If the board decides to go with 2.50 percent or .51 mills, increasing taxes to 20.96 mills, the same property would pay $71.89.

Due to state regulations, the board can not increase the millage when they adopt the final budget next month, but they could lower the rate, Stayer told board members.

“What we approve tonight can’t go any higher,” he said.

Real estate taxes are the single largest contributor to the district’s budget and would account for $38,056,167, if passed at the 3.10 increase.

For the 2012-13 school year, the millage rate was 19.02. In 2013-14, the millage rate was 19.41; in 2014-15 and in 2015-16, the millage stayed at 19.6. During the 2016-17 school year, the millage had been raised to 20.45.

The salary of professional staff is the single biggest expense of the budget, at $20,530,835. Cost for support staff is $4,510,135, and for administration, $2,571,319.

Retirement costs account for $9,190,349 and insurance such as medical and dental amounts to $5,554,579.

Debt service is $6,471,436; transportation costs are $2,166,050; and charter school tuition, $760,000.

An uncertain economy makes the proposed budget decision more difficult, Stayer said.

“We don’t know what the federal government is going to do, we don’t know what the state is going to do, and we don’t know if the governor’s proposal will go through,” he said. “They (the state) are supposed to have a budget by June 30, but we’re supposed to pass our budget by June 1, and not knowing puts us into a quagmire.”

The state is currently experiencing a significant shortfall in its own budget, Stayer said.

“We don’t know what’s going to happen, but we’ll continue to monitor the (state’s) situation until next month, when we have to make a decision,” he said.

Because of the uncertainty of how much funding the district would be receiving from the state, Stayer said he recommended the board go with the 3.1 percent increase.

All board members agreed.

“We know from past years that expectations don’t always comes to fruition,” said board member Glenn Miller. “At this point, I’ll support the 3.1 percent.”

School districts across the Commonwealth are facing challenges, Stayer said.

Costs for special education services, for example, have risen dramatically in the past several years. In 1999, the district paid about $2,000,000 for special education for students. Last year, that figure rose to nearly $8,000,000.

“The state is mandating we do this; we’re obligated by law, but they’re not even providing half of that money,” Stayer said.

Pension costs for staff and charter school payments made by the district are also challenging to a school budget, he said.

“These are significant things felt across the state,” Stayer said. “Many schools find they have to cut programs or increase class size and that has a negative impact. At Ephrata, we haven’t had to do that.”

Currently, the proposed budget of Gov. Tom Wolf includes an additional $2 million for breakfast programs, $75 million for “Pre-K Counts,” and Headstart, and $2 million to help three districts that have “low performing” schools.

Any mention of proposed pension reform or property tax reform were not included in Wolf’s proposed budget, Stayer said.

“The state legislature was trying to move in both these areas, but we haven’t heard anything lately on these issues,” Stayer said.

 

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