$98.6M budget calls for 2.8% tax hike

SOUTH COVENTRY >> The Owen J. Roberts School Board unanimously approved a budget for the 2016-17 school year that raises district property taxes by 2.8 percent.

The newly approved general fund budget totals $98,627,641 and represents a $4.1 million increase over the current year’s 2015-16 budget.

In order to balance the budget, the board approved a .8 mill tax hike that raises the taxes levied by the district to 29.6305 mills, or about $2.96 per 100 dollars of assessed property value. For the average homeowner with a property assessed at $190,000, that equates to an additional $111 in taxes to the district each year, according to district Chief Financial Officer Jaclin Krumrine.

The 2.8-percent tax increase is slightly above the state’s Act 1 index, which is 2.4 percent for the Owen J. Roberts School District. The board received approvals from the state Department of Education for exceptions that allowed for the additional .4 percent tax hike. The district qualified for exceptions to cover mandated increases in its contribution to the Public School Employees Retirement System (PSERS) and special education expenses.

The 2016-17 budget includes a $3.8 million spike in personnel costs — a 6.2 percent increase that brings total personnel costs to $66,356,746. That expenditure hike is largely due to a 4.19 percent state mandated escalation in the district’s contribution to PSERS that totaled $2 million, Krumrine said. However, the district was prepared for that increase.

As with all school districts in the state, Owen J. Roberts’ contribution to PSERS has been rising steadily each year, and will continue to do so for the next several years. In the 2009-10 school year, the district’s contribution to PSERS was less than 5 percent. For 2016-17 it will rise to 24.84 percent. To cover those costs, the district has set aside a portion of its fund balance specifically to handle the annual PSERS increases, thereby lessening the impact on taxpayers.

The PSERS expenses aren’t

the only negative impacts the district has experienced due to state budget changes. The district still doesn’t know at what level the state will fund the basic education and special education subsidies for 2016-17. In fact, only recently did the state agree to pay a subsidy for the current school year that was funded at 2014-15 levels.

Another significant challenge for the district lies in the state’s failure to provide anticipated PlanCon reimbursements for building projects the district has completed over the years. Although the state legislature has agreed to borrow money in order to reimburse schools, “We don’t know when that borrowing will take place and we haven’t been notified about when we will receive that money,” Krumrine said.

The result is a $590,000 shortfall for the current year that the board has covered with its fund balance. The district won’t be able to make up that shortfall and replace the money in the fund balance until the reimbursements are received.

Krumrine noted that the PlanCon money owed is not related to the current East Coventry and East Vincent Elementary School projects, but is a state reimbursement for earlier construction projects.

In addition to the complications posed by state-related funding issues, the district is also seeing revenues from some federal sources drying up. In particular, $178,000 is being cut from federal ACCESS funds that reimburse the district for special education medical services.

Overall, the district’s revenues from federal sources totaled only $520,121, a decrease of $12,417, or 2.33 percent, over the current year.

Special education costs continue to be a source of financial concern for the district, particularly since revenue from state and funding sources has remained static, while the district’s costs have steadily risen. In 2008-09, the district’s special education costs totaled $8.3 million, while revenues were just under $2 million. For 2015-16, revenues are about the same, but the expenditures have jumped to $13 million.

Nevertheless, the board had some positive budget news. Assessed property values have gone up slightly leading to an increase in revenue from real estate taxes. However, all other local revenues remained level or decreased.

The budget is available on the district’s website at www.ojrsd.com