Board adopts budget, tax hike
LOWER POTTSGROVE » A $70 million Pottsgrove School District budget that will raise property taxes by 1 percent was adopted in a 7-1 vote on June 8.
Board member Bill Parker voted against the budget and was joined by board member Ashley Custer in voting against the tax rate that will fund the $70,507,363 budget for the 202122 school year.
As District Solicitor Marc Davis explained to some of the more confused board members, the budget vote supports the expense side of the spending plan; the tax rate, or millage, vote, supports the revenue side, or how to pay for it.
The separate votes had to do with a suggestion that the 1 percent tax rate may not generate enough revenue for the administration in an uncertain budget year.
Board Vice President Al Leach had pushed the administration to come up with a budget that could use a 1 percent tax hike rather than the 1.5 percent they recommended.
When that was done, Leach had second thoughts and tried to convince the other board members to split the difference and raise the tax rate by 1.25 percent.
“I feel like we are cutting things a little too close. We should probably do a 1.25 percent tax hike. It would provide a little extra money if we need to hire new teachers,” Leach argued.
Custer said she agrees “100 percent” with Leach and supported the higher tax rate. So too did board member Patti Grimm, who said “I’m really, really scared with that 1 percent” tax hike.
Business Manager David Nester, presiding over his final budget vote before he retires at the end of the month, said the slightly higher tax hike would generate about $90,000 in additional revenues.
He also said Leach’s motion would have increased the annual property tax bill for a home assessed at $120,000 — the district median — by $12 more than the 1 percent tax hike.
But that motion failed by a 6-3 vote, with Board President Robert Lindgren, joined by board members Tina McIntyre, Jay Strunk, Bill Parker and Charles Nippert voting no.
Nester had said raising the impact of the tax hike to 1.25 percent would be simply that less money would be taken from reserves to balance the budget.
As it stands now, the budget the board adopted last night relies on $258,000 from reserves and another $2 million in federal COVID grants to be balanced, he said.
Last month, Nester warned the board that Pottsgrove has a “structural deficit” unless it raises taxes by about 2 percent every year if one or two large tax hikes are to be avoided.
Parker emphasized that issue when explaining why he voted against the budget and both tax rates. He said the $2 million federal grant for the coming school year, and the $3.7 million federal grant expected for the year after that “won’t be there in three years.”
He said the board should look at reducing administrative costs to put the budget back in balance. Parker also voted against promoting Paige Petrillo from teacher on special assignment to supervisor of special education, thus raising her salary to $100,000.
“Now is not the time to be adding a six-figure salary to the budget,” Parker said.
Lindgren said the incoming superintendent, David Finnerty, who starts July 1, will have to survey what he sees as the district’s administrative needs and make those recommendations to the board.
In addition to Nester and Superintendent William Shirk retiring at the end of the month, Assistant Superintendent Robert Harney is also retiring, so Finnerty will be building his senior administrative team from the ground up.
In the meantime, the board voted unanimously to provide Assistant Business Manager Ron Linke with a $1,300 per-month stipend to keep doing his job as well as Nester’s until the top business manager position is filled.
In explaining her support for the 1 percent tax hike, McIntyre noted that despite the district’s financial obstacles, “we always seem to have a surplus at the end of the year.”
Nippert agreed and said, “the fund balance is supposed to be a rainy day fund.” If a year of pandemic surprises “is not a rainy day, I don’t know what is.”
That district’s bottom line may be helped by a settlement the board approved Tuesday with the architecture and engineering firms in charge of the high school renovation project.
The settlement was based on the need to install a second boiler “to make the heating system work the way it is supposed to,” as Lindgren described it, and netted the district $490,000.
McIntyre also pointed to 55-and-older homes being built in the district which will add to the tax base without adding the expense of school children.
In the end, the tax rate/ millage adopted is 38.483 mills, which means $38 tax on every $1000 assessed valuation of taxable property for the 2021-22 fiscal year.
For a home assessed at $120,000, the new budget will increase property taxes by $46, according to Nester.
The board unanimously also adopted the Act 55 taxes, sometimes called “nuisance taxes,” unchanged from the current year.
They are: a 1 percent earned income tax; a per capita tax of $5 levied on all Pottsgrove residents who are 18 years of age or older; a 1 percent real estate transfer tax; and a mercantile tax of 1 mill on wholesalers and 1.5 mills on retailers.
One of the expenses outlined in the new budget is a new school bus contract with CMD Services, along with the purchase of three new school buses.
Two of the buses being replaced are 18 years old, and the third is 16 years old, said Nester, prior to the board voting to move ahead with the purchases.
The one-year contract with CMD Services calls for an increase of roughly 3 percent, justified, Nester said, by the fact that the company cut $25,000 off its prices during the COVID crisis.
That, compounded by the fact that with all the attendance changes the company “basically had to program routes for four different school years” in the last school year, said Nester.
Only Parker voted against the new bus contract.