Budget OK’d with tax increase
LOWER POTTSGROVE » With a 7-1 vote, the Pottsgrove School Board June 27 adopted a $66 million budget for the coming school year that will raise taxes for the average homeowner by about $18.
The median residential assessment in the district is $120,000 and the $18 annual increase is generated by a .1472 mill increase in the tax rate — an increase of .39 percent.
Board Vice President Al Leach cast the only vote against the budget, arguing that the roughly $150,000 budget gap the tax hike will close could be closed instead by using some of the district’s nearly $13 million fund balance.
He said the surrounding districts of Boyertown, Spring-Ford, Pottstown and Owen J. Roberts have all used fund balance to close much larger budget gaps.
According to the statement posted on the district web site with the agenda, the budget already uses “$750,000 of our PSERS reserve and $80,000 of fund balance committed to offset increases in the Western Montgomery County AVTS budget to balance the budget.”
Also, Board President Matt Alexander and member Rick Rabinowitz argued that drawing $150,000 out of reserves increases the following year’s budget gap by that much more.
Given the capital needs the district has, including replacing two roofs, “if Pottsgrove went down that path we would be bankrupt in a short period of time,” said Rabinowitz, adding, the tax increase “is still more than I want, but is relatively small comparatively speaking.”
According to the budget document sent to Harrisburg, Pottsgrove has $8,975,213 in “committed reserves,” which is primarily money set aside to pay for rising pension costs and for a capital reserve needed because the district
Matt Alexander, Pottsgrove School Board President “With a $200,000 question mark from the state, I’m not willing to reduce our savings in the fund balance.”
has maxed out its borrowing capacity with the high school renovation and expansion project.
Pottsgrove has another $4,411,923 in “un-committed” reserves, which represents just under 7 percent of the total $66,078,612, which is about what the minimum the state recommends a district hold in reserve as part of sound fiscal policy.
Alexander said “with a $200,000 question mark from the state, I’m not willing to reduce our savings in the fund balance.”
He was referring to the state budget, which remains a question mark for all 500 school districts in Pennsylvania.
Business Manager David Nester said the Pottsgrove budget is built under the assumption the district will get the $125,000 increase in basic education and $75,000 more in special education funding proposed by the governor and approved by the House.
That budget also calls for a cut of $90,000 in transportation aid, which some reports indicate may be restored by the Senate.
Board member Ashley Custer also pointed out that there is talk in Harrisburg about passing property tax reform this session — which would have a profound impact on school finances and is another reason to guard the reserves.
“We need to cover our butts,” said Custer. “If that passes, schools will be in serious trouble.”
There has been very little budget information coming out of Harrisburg, said Nester, which is why he advocates leaving the reserve funds largely intact.
“We’ve built sound financial platform in Pottsgrove, and we weather the fiscal crisis,” he said. “I believe small increases are much better than zero and a spike. Nobody remembers the zeros when you get a 10 percent tax increase,” he said.
Over the past seven years, Pottsgrove tax hikes average out to about 1.7 percent, he said. “My belief is in slow and steady.”
Superintendent William Shirk thanked the board for supporting the administration’s efforts and said the budget would not require any program cuts, but warned “we might not be able to say that next year.”
“The county is working hard to reduce homelessness and when it does occur, making it rare, brief, and non-recurring. These new findings are moving in the right direction, but we must continue our efforts to support Your Way Home as they work to improve housing stability and economic security for those at risk of losing their homes and re-house those who have lost their homes.”