School district hikes taxes 2.8%

District in 'blindfold' with state budget not set, but at deadline for vote

FRANCONIA » Property taxes in Souderton Area School District are going up 2.8 percent for the $142,246,340 2022-2023 budget approved the day before the July 1 start of the new budget year.

With the state budget, including education funding, not yet set, Souderton Area School Board did not take a scheduled final vote on its budget at its June 23 meeting, instead recessing the meeting to reconvene another time after more information could be received on the state funding.

By June 30, the final day under state rules for the school district to set the budget, the state budget was still not done.

“It’s a frustrating process because a large percent of our budget relies on Harrisburg to approve its budget, which has not happened yet,” said Assistant Superintendent and Director of Human Resources Christopher Hey.

That leaves local officials flying blind through no fault of their own in meeting the budget deadline, he said.

There is positive news from Harrisburg saying the state will increase education funding, “but we have not heard what those numbers will be yet,” Hey said.

Board President Ken Keith said the budget did not cut any school programs and included the district’s move beginning this fall to full-day kindergarten.

“This’ll bring a huge learning advantage to our young students,” he said.

In addition, the district has signed new labor contracts with multiple employee groups in the past year, he said. That includes a new five-year contract with district teachers approved by the board on June 23.

Construction projects in district schools will not only help keep the buildings in tip-top shape, but will also enhance efficiency, Keith said.

The district’s good credit rating helped it get low interest rates to borrow for the current construction projects, he said. Financing the $30 million of

capital spending for construction added less than one percent to the tax bill, he said.

The district has a history of being well below the state cap on the percentage tax hike allowed, he said.

“During historic inflation, nothing pains us more than having to pass a tax increase on our residents,” Keith said.

“We believe we’ve earned the trust of our residents to understand that when spikes happen, they’ve been vetted to an extreme,” he said, characterizing the spike as “necessary and legitimate.”

This year’s state cap was 3.4 percent. The 2.8 percent hike comes after tax hikes of less than one percent in five of the previous seven years. The highest increase during that period was 2.4 percent for the 2018-2019 school year.

“Without any information from Harrisburg on the final monies coming to us for education in the ‘22’23 school year, we must err

on the side of caution and eliminate the risk of deficit should they choose not to forward additional funding,” Keith said. “It has been said on a consistent basis that this school board does not wish to pass the annual budget with a blindfold on, but we have no choice now that the deadline’s come and the hour’s upon us.”

The budget and tax hike were approved by a 6-1 vote, with Finance Committee Chair Donna Scheuren casting the lone dissenting vote and board members Bill Brong and Courtney Barbieri not present. Prior to the vote Scheuren asked if there was any word from Harrisburg on the possibility of school districts reopening budgets after the state finalizes its budget and was told the state had not given any information on that. Because of that, Scheuren said, she was voting against the budget.

The 2.8 percent hike increases the millage rate to 31.44 mills, Director of Business Affairs Michael Taylor said.

The homestead exemption this year is $257.15 for homes in the program, he said.

“That’s about a 20 percent increase from prior years,” Taylor said. The increase is because of increased gambling revenue to the state, he said.

The homestead exemption, which is funded by legalized gambling, provides a discount to property taxes on owner-occupied homes.

The median assessed value of a Souderton Area home in the homestead program is $157,380, Taylor said. At the new 31.44 mill tax rate, the bill for a home assessed at $157,380 is $4,948.03, an increase of just under $135 from last year’s 30.5837 mill rate.

Each mill equals $1 of tax per $1,000 of assessed value.

Tax collectors have been given the new millage rate and homestead exemption amount and tax bills were expected to be in the mail the first week of July, Taylor said the afternoon of June 30.

The six municipalities in Souderton Area School District are Souderton and Telford boroughs and Franconia, Salford, Lower Salford and Upper Salford townships.