Bottom line: Taxes going up for residents

Taxes are going up for residents in Phoenixville borough, according to their budget plan.

PHOENIXVILLE >> Increasing costs and mandates from Harrisburg continue to force school districts across Pennsylvania into a bind as they look for ways to prevent raising taxes. In Phoenixville, officials approved the preliminary budget, which, if it were to go into effect now, would have property owners dipping further into their wallets.

The school board unanimously approved the 2017 preliminary budget of $92.7 million, which calls for a 5.62 percent tax hike Thursday night. The budget includes a millage rate increase of 1.64 mills from the current rate of 29.16 mills to the proposed 30.80 mills. A 5.62 percent real estate tax hike equates to an increase of $221 to the median taxpayer with a $135,000 home assessment. A mill is equal to $1 for each $1,000 of assessed property value.

The budget includes $92.7 million in expenditures and $91.4 million in revenue, according to the district. To cover the difference, the budget uses $500,000 from the Public School Employees Retirement System (PSERS) reserve and $725,000 from fund balance. The budget also seeks $1.5 million in exceptions from the Act 1 index from the Pennsylvania Department of Education for debt, special education and retirement.

Board President Kevin Pattinson was quick to remind those in attendance Thursday that this was the preliminary budget and there was plenty of work to do before a final budget can be approved by the June 30 deadline. Board member Eric Daughtery agreed saying the final budget will look much different.

“We elect to pass the preliminary budget so we don’t need to pass a resolution that limits us to the Act 1 index,” said Daughtery, who chairs the finance committee, during the Jan. 12 workshop meeting. “And we don’t need to go to referendum.”

The district faces several challenges with this budget stemming from uncertainty in Harrisburg and increased costs. Currently state funding accounts for about 17 percent of the district’s budget. With little idea as to the amount it plans to receive, the district’s plan is to assume state funding will remain the same from last year, with the exception of PSERS.

Costs also continue to rise. There are mandated increases in expenditures, including PSERS contributions from 30.03 percent to 32.57 percent (8.46 percent year-overyear increase) and a large increase in special education, according to the district. In fact the district has budgeted over $1 million in increased spending for special education outside services.

“We elect to pass the preliminary budget so we don’t need to pass a resolution that limits us to the Act 1 index. And we don’t need to go to referendum.” — Eric Daughtery, Phoenixville Area School Board member

Additional costs include five new positions in the district including a new grounds person and four education positions. Further more, the current year is the first year on the high deductible health insurance plan. Druing the 2015-16 school year, claims totaled $6.1 million. The 2017-18 budget includes $5.5 million in claims, according to the district.

Other costs include decreased Vo-Tech tuition and debt service payment. Debt service adds about $400,000 to the budget this year to pay for the new school construction costs, according to the district. The district expects there to be refund opportunities available later this year but they are unknown at this time. The debt service line item for 2017-18 is projected to be $10.3 million or 11.22 percent of the preliminary budget.

Lastly the district has to contend with little growth in the tax base. The Local Economic Revitalization Tax Assistance project timeline phases in over 11 years. Slow growth in revenue makes it more difficult to pay for increased costs. Local revenue shows an increase of $621,784 due to increases in Earned Income Tax and an increase in Occupation Taxes. These increases are due to construction and new residents, according to the district.