School district to receive fair share ‘bill’
Borough sending out yearly letters to nonprofits asking for contributions in lieu of taxes
In the next couple of weeks, letters will be going out to all tax-exempt organizations in the borough asking them to pay their fair share of taxes. The “bill” they will get will resemble the amount they would pay if they were not tax-exempt under federal statute.
One of those bills will be going out to Kennett Consolidated School District. On Monday night, Kennett Square Councilman Wayne Braffman asked Bob Norris, a Kennett school director, if he is aware the borough is looking for payment.
“Yes, I am aware of it,” Norris said. “But I remind you that what we take out of this pocket will come from that pocket. We get revenue from the same place as you. Frankly, I believe 80 percent of tax dollars goes to the school district.”
Called payment in lieu of taxes, the “bill” is strictly voluntary, and tax-exempts are under no obligation to pay it, or even a portion of it.
“The thought behind this is everyone uses public safety services, and it is good for the town, and if they want to contribute, by all means, go ahead,” said Councilman Geoff Bosley shortly before the borough enacted a resolution earlier this year. “We have terrific public safety in this town and everyone uses it. We put a lot of money into public safety, and people want to feel safe and well protected.”
But the district has very little wiggle room to authorize new spending. In fact, paying the bill would almost certainly necessitate a school district tax hike.
Norris said that salaries and benefits take up 60 per-
cent, or $48 million, of the 2016-17 $81.9 million Kennett Consolidated School District budget. And 20 percent of that $48 million, or $9 million, is devoted specifically to pension obligations.
“Our pension bill will continue to be high at least for the next two or three years until the state catches up,” Norris said.
Another 10 percent of the budget goes to state mandated
programs. Norris said school directors only have discretionary spending of about 30 percent, which is dedicated to programs and buildings.
The average cost to educate one child for one year in Kennett is $14,000, yet the average property owner in Kennett pays about $5,300. “That’s a very big margin that has to be made up,” Norris said.
About one in every five students at Kennett schools gets special education, either through health, emotional or behavioral issues, or through the ESL program.
The cost to educate a special education student in Kennett is $20,000 per year, per student, but could go as high as $100,000, Norris said. The district recently hired a consultant to look at containing special education spending to ensure tax dollars are spent effectively and efficiently. The district’s enrollment currently is $4,200 students, with a maximum capacity of 4,500.
Borough officials recently put together a comprehensive list of every tax-exempt property in the borough. The funds collected will go toward the 2017 budget.
The funds are sorely needed to help reduce the borough’s debt obligation. To balance the budget last year, the borough needed to transfer $750,000 from the water, sewer and trash fund into the general fund. The borough’s uniformed workers (police officers) received a 3 percent wage hike, and non-uniformed borough workers got a 2.5 percent hike for 2016.
Doug Nakashima, executive director of the Kennett Area YMCA, said the Y is a vital nonprofit that has a positive impact on Kennett Square, adding that payment in lieu of taxes “has no merit.”
The letter will be going out to borough churches, the Kennett Senior Center and even the Garage Community Youth Center.