Draft budget raises taxes 4%

PHOENIXVILLE » The school board has unanimously approved a preliminary $94 million budget for the 2018-19 school year that would raise property taxes by 4 percent.

However, board Vice President Eric Daugherty assured taxpayers “this is not the budget we are going to end up with.”

The board will not adopt a final budget for the coming school year until June and the one adopted last week is as much a place holder as it is a spending plan, he said.

Rather the vote, he said, is something state law requires unless the board is willing to adopt a resolution vowing to stay at or below the state-imposed tax cap of 2.4 percent.

The state does allow “exceptions” to exceed this cap without seeking voter approval for a limited number of costs.

In Phoenixville’s case, the board wants the option of taking advantage of the construction and special education

“exceptions,” Daugherty said.

Those exceptions would allow the additional taxes, which would generate another $875,000 in revenues.

However, even with a 4 percent tax hike, the budget has a gap of $3.3 million between anticipated revenues and expenses, he said, so there is still much work to do.

But there is a potential bright spot in that effort.

School board President Lisa Longo said the preliminary budget currently does not include any property tax revenues from Phoenixville Hospital.

This despite the fact that Phoenixville, Coatesville and Avon Grove school districts all challenged the “charity hospital” status of Tower Health — which now owns hospitals in all three school districts.

And they won, at least

before the Chester County Board of Assessment.

District Superintendent Alan Fegley said meeting the “charity hospital” standard requires passing five “tests, and we simply pointed out to the assessment board that Tower Health, as a new entity, has no track record of acting like a charity hospital.”

As a result, unlike in Montgomery County where Tower Health’s non-profit status was

granted and those tax revenues lost to Pottstown, those school districts and their municipalities stand to receive property tax revenues — at least for another year.

Tower Health has since challenged the county assessment board’s decision in court, said Fegley, although no hearing date has yet been set.

Nevertheless, any court proceeding is likely to stretch beyond June 30, the end of the fiscal year, meaning “it’s looking likely at this point” that the school district would get the $950,000 tax payment for the Phoenixville Hospital property for at least one more year, said Longo.

In the meantime, Fegley told the school board, “we’re reached out to Tower Health about entering into a ‘payment in lieu of taxes’ arrangement.”