Budget includes tax increase
Board, administration point to unfunded mandates, funding formula issues as part of reason for hike
Property taxes in Souderton Area School District are increasing by 2.4 percent following the school board’s approval at its June 21 meeting of the $127,342,536 2018-2019 school year budget.
The tax hike is the largest for district property owners since the 3 percent increase for the 20122013 year. In each of the past five years, taxes increased by 1 percent or less.
“This is the first time in six years that the Souderton School Board does not have good news with regards to the budget,” board Vice President and finance committee Chairwoman Donna Scheuren said. “More importantly, we are not the school district with the lowest tax increase in Montgomery County.”
She and the rest of the board are not happy about the increase and have done everything in their power to make it as little as possible, she said.
On the income side, the district has worked with local businesses to help the businesses get state tax credits bringing in more donations to the schools, seeks out grants and has begun offering sponsorship packages for district athletic facilities, she said.
There have also been moves made to reduce costs, she said.
“We are consolidating bus routes, cutting individual building spending, opening up and renegotiating contracts before they are due, selling off school property to the tune of $3.2 mil-
lion,” Scheuren said, “but it is still not enough to cover the costs of running two separate school systems within our district.”
Information about the budget in recent district emails and on the district’s website has pointed to charter school costs as a primary reason for the tax hike.
Other costs, including retirement funding, health care and transportation are also increasing, but the school district information only mentions the charter school costs, John Page, a Souderton Charter School Collaborative board member, said.
“Why are you diverting everybody’s attention to the charter school, which was a very small fraction of the unexpected costs?” Page asked.
“Our concern is really with the laws that drive the funding models,” board President Ken Keith said.
“We don’t have issue with Souderton Collaborative, but we are the only district in Montgomery County that has a bricks and mortar charter school and it’s one of our major budget pressures,” Superintendent Frank Gallagher said.
The Souderton district pays out more than $4 million for charter school costs, but receives only $7,000 of state funding to help offset those costs, he said.
Pennsylvania’s charter school law has been rated the worst in the country, he said.
“A big part of that is the way the funding formula works,” Gallagher said.
The district has some control over health care and transportation costs and is taking steps to reduce those costs and the state has made changes to the retirement system, but the district has no control over the state formula for charter school funding, so it is advocating for changes, he said.
Page said there was an unexpected change in state funding, but not much change in the district’s payments to the charter school.
“The actual funding shift does not change much from year to year,” he said.
Keith said the district’s costs have increased significantly.
The Souderton district pays out $4.2 million for charter schools, including $3.1 million to Souderton Charter School Collaborative and $1.1 million to cyber charter schools, Scheuren said in her budget comments.
“Armed with the knowledge that our budget shortage was related to unfunded mandates from Harrisburg on special education costs and increases to charter school tuition payments, we decided to educate the public on the true costs they actually bear on their backs,” she said.
“Sadly, if major changes are not implemented to the unfair funding formula of charter school reimbursement,” she said, “we will be staring down the same sort of increase for next year once again with the board’s hands tied behind their backs.”
The budget, approved in an 8-1 vote, with board member Janet Flisak casting the lone dissenting vote, sets the new tax rate at 29.6201 mills. For the owner of a home assessed at $150,000, which is about the average for the district, the tax bill increases by about $104, to $4,443.02. Each mill equals $1 of tax per $1,000 of assessed property value.
The deduction for properties with the homestead/ farmstead exemption is $200.29 this year, Bill Stone, the district’s director of business affairs, said. Funding for those deductions comes from legalized gambling in the state.
Property taxes bring in almost $80 million for the budget, with earned income taxes bringing in another $8 million, budget information shows. The $127.3 million budget includes almost $80 million of instruction costs and just over $36 million for support services. Regular education programs account for $54.3 million of the instruction costs, with special education at $22.8 million. Vocational education instruction costs are a little more than $2 million.
District administration costs are pegged at $5.3 million. Student transportation is $7.7 million.
Consent agenda items approved at the June 21 meeting included $107,671.61 of bids for supplies in the coming year. The supplies include $36,781.07 for paper, $18,740.30 for paint for art classes and $19,191.96 for other art supplies.
Another consent agenda approval was to write off $24,000 of delinquent real estate taxes owed for the Broad Theater in Souderton. In return, Souderton Borough will write off a landscaping fee for the district’s construction work at E. Merton Crouthamel Elementary School.
In another matter at the meeting, Vernfield Elementary School teacher and Souderton Area Education President Carol Luciani reported on donations and scholarships funded by the SAEA.
“It’s an impressive list to say the least,” Keith said.
“It doesn’t go unnoticed,” he said. “You affect many families in a very positive way.”