Official urges steady tax hikes
LOWER POTTSGROVE » The retiring business manager of the Pottsgrove School District has some advice for the school board — keep raising taxes, a little bit every year.
The Pottsgrove School District may have kept the tax hike for the coming year’s budget below 2 percent, but that can’t continue, Pottsgrove Business Manager Dave Nester told the school board Tuesday.
Nester, who will retire at the end of June after 20 years steering Pottsgrove’s financial ship, has long been an advocate of small, regular tax increases to avoid sudden large ones.
Tuesday night, May 25, he outlined his projections for the entire school board about how to face what he and school board president Robert Lindgren are calling Pottsgrove’s “structural deficit.”
Nester said for the next two years, about $3.8 million in federal COVID aid is being used to balance the budget and cover expenses, but after that, Pottsgrove’s structural deficit will come into play.
By the 2028/2029 school year, Pottsgrove’s annual debt payments of about $5 million will begin to “drop off,” but until then the district faces financial hard times.
In the meantime, the board Tuesday night voted to authorize the refinancing of more than $27 million of that debt to net a savings of as much as $800,000.
But that savings will not dig Pottsgrove out of the structural financial hole Nester says it is in.
Increasing property taxes by about 2.25 percent every year would add about $900,000 to the district’s revenue line and help cover rising costs, even if they only rise by 1 percent each year he said.
Otherwise, taxpayers can expect a 5 percent tax hike in the next two or three years and, given that the state tax cap, called the “Act 1 Index,” would not allow a tax hike that large, the board might have no choice but layoffs, program cuts or both.
Late last month, the board adopted a preliminary $70 million budget that calls for a 1.5 percent tax hike. Several board members have advocated to get it down to 1 percent or less.
In the long run, as long as school districts continue to live and die by the property tax, the district’s financial viability may depend on something completely out of its control — development in the townships.
“We don’t have the big businesses that pay big tax bills. Most of the people who pay taxes in our district are single family homeowners,” Lindgren said.
“We need more business owners, to have discussions with townships to have more commercial spaces, make the zoning changes necessary to make that happen. It’s really that simple,” says Lindgren.