School board weighs tax hike

By on May 18, 2016

Ephrata area property owners can expect a bump in school taxes this year.

A preliminary budget passed by Tuesday by the Ephrata Area School District board includes a 2.9 percent increase.

The jump raises the tax rate .58 mils to 20.63 mils, meaning the average home in the district valued at $138,000 would see an annual $81 tax hike.

Board President Tim Stayer suggested the final budget could be less and the final budget would not be officially ratified until the June 20 school board meeting.

He said much could happen before then, including favorable budget figures from Harrisburg and revisions from the district administration.

However, that could be challenging with on-going issues of delayed state funding and required funding for state employee pension funding, PSERS.

Stayer detailed how careful stewardship during the previous and current administration, EASD is in a far better position to weather these challenging times thanks to a healthy fund balance.

“This is based on the best knowledge we have at this time,” said Stayer. “We will also be working on this in committee over the next month. Students are always in the center of our entire process of what we do but particularly with the budget.”

Stayer reminded those present that while EASD has consistently passed their budget on time as required while the state has not, creating havoc for districts statewide.

Some of what was initially proposed by Governor Tom Wolf included increases in some areas but those increases came with tax increases in other areas. Beyond that, hoped for property tax reforms did not happen. Increases in funding for Career and Technology Centers sound great but are spread across over five-hundred such centers statewide.

Details of the preliminary budget: Revenues are expected to be $63,748,235 with expenditures expected to be $63,186,410 for a net budget of $561,825. With one-time Debt Service Savings of $1,150,233, the adjusted budget is a shortfall of $588,408 which is made up through funds from the Fund Balance.

Said Stayer, “Our legislators know that property taxes have not been able to keep pace with the increases in PSERS. Even at 2.9 percent, that does not cover our increased PSERS costs.”

Even with this coming year marking the last year of large PSERS funding before leveling out over the next three years, for next year district PSERS expense will increase 30.03 percent or $1.3. For 2017-2018 it will be an additional 32 percent which translates into $1.3 million-plus and additional $7000,000.

One-time debt savings of $1,150,233 is timely help this year, limiting the amount needing to be pulled from the fund balance. Stayer equated that fund balance to a rainy day fund and said that in preparing the preliminary budget, a number of different scenarios were looked at regarding the balance. He explained the importance of the district maintaining such a balance.

Said Stayer, “For example, with no state budget until April this year, this balance helped to cover payroll and daily expenses. Having a rainy day fund can also help cover unexpected expenses such as an emergency roof repair or storm damage. The strength of fund balance does impact our credit rating, our insurance rates and it provides a safety net for unexpected one-time expenditures. The size of such a fund really depends on the size of the district, the condition of the physical school buildings and more.

Having a fund balance is an important and necessary part of any healthy school district.”

Passing a preliminary budget with a possible tax increase was not easy but as Stayer reminded the board, in two of the prior five years, the district was able to pass a zero increase budget. However, with the challenges put forth in the coming and upcoming years, doing so again this year is highly unlikely.

“We grapple with that very difficult question,” added Stayer. “We want what’s best for the children and try to keep this in balance. This preliminary budget gives us the greatest leeway.”

One taxpayer, Heather Myer, was on hand for the meeting and was supportive of the board’s decision.

Said Myer, “Those are the kids that will go out into the world and we need to invest in our children and our children’s children.”

Board member Bob Miller pointed out that there is no valid reason to not act on this now.

“Some can say we are sitting on this money but in reality because of these increases that are coming there is this massive storm coming,” said Miller. “If we don’t take proactive steps now, just wait to see how much worse it can get.”

Following discussion, the preliminary budget was approved by unanimous roll call vote. The budget is now available for public review ahead of ratification at the June 20 school board meeting.

Finally, during open comments at the beginning of the meeting, two local parents encouraged the board to encourage approve a playground area at Ephrata Intermediate School. Kim Buehler and Heather Myer both passed on the comments from their children and their friends saying that such equipment was a necessary alternative to free time in the gym each day.

Buehlers’ children called the gym boring and said they wanted the playground for exercise. She added that she felt that bit of an afternoon break each day to get some fresh air and time to refresh was important to students and teachers alike.

Myer’s children agreed adding that she was sure teachers would appreciate such a break in the middle of the day.

The new playground was approved as part of the consent agenda at a cost of $54,768.40.

For additional information on Ephrata Area School District, please visit their website at www.easdpa.org. Gary P. Klinger welcomes your questions and feedback via email at klingerglobal@gmail.com.

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