Tax hike capped at 2.8pct.

District’s $3.8M shortfall dwarfed by $8.2M surplus

A recent 7-1 vote of the Perkiomen Valley School Board capped any potential tax hike in next year’s budget at 2.8 percent, but a big budget deficit remains.

The 2.8 percent cap is the limit set by the state, beyond which the board would need to seek voter approval.

Outgoing board member Lynn Bigelow cast the only dissenting vote at the Nov. 13meeting, arguing the decision about whether to live within the limit — called the index — or seek exceptions that would allow the budget to raise taxes above 2.8 percent without a public vote, is a decision that should be made by the incoming board.

On Nov. 7, voters ousted two incumbents and voted in four new board members.

With the vote, the board gave the administration more time — essentially until the end of June — to figure out how to close a projected budget deficit of $3.8 million in the 2018-2019 budget.

To close that gap with taxes alone, would require a property tax hike of 5.6 percent, Jim Weaver, the assistant to the superintendent for business administration, told the board at Monday night’s meeting.

As it stands now, the $108 mil-

lion draft budget represents a 3 percent increase in expenditures, but an increase in revenues of only 1 percent, Weaver said, according to live Tweets from Monday night’s meeting on the district’s official Twitter account.

In a budget presentation made to the board at the Oct. 2 board meeting, Weaver said the district would generate about $81 million from real estate taxes, $23 million from state sources and $500,000 from federal funding.

Another $12 million can be counted upon from earned income taxes and another $825,000 from real estate transfer taxes, which are imposed when a property is sold and changes hands, Weaver said.

Overall, local revenues are expected to increase by nearly $500,000, and total revenues by just over $1million— an increase of a little over 1 percent — according to the Oct. 2 presentation.

However expenditures are expected to increase by $3.2 million, $1.3 million of which is due to salary and benefit increases contained in contracts with the employees, Weaver said Nov. 13.

“This is just a start. We still have six months to work on the budget,” he said, according to a Tweet from the district.

However, the projected $3.8 million budget shortfall for the 2018-2019 budget is dwarfed by the $8.2 million surplus in the current budget, identified in budget parlance as “unassigned fund balance.”

That is within the 8 percent of the total budget recommended by the state, Weaver told the board.

Weaver said some of that could be used to close the budget gap and decrease a potential tax hike.

“The district should always work toward softening future increases by using committed balances,” he said according to a Tweet from the district.

Additionally, there is $235,163 left in the capital project’s fund after projects undertaken over the summer and another $492,000 in the fund ded--

“The district should always work toward softening future increasesby using committed balances.” Jim Weaver, Perkiomen Valley Schools business manager

icated to covering perennially increasing PSERS pension payments.

But that surplus got smaller by $2 million Monday night when the board followed Weaver’s recommendation and voted to move $1 million of the surplus into the capital projects fund and another $1 million into the PSERS retirement fund.