New budget update shows positive trend

FRANCONIA >> In normal times, about 3 percent of Souderton Area School District’s property taxes go to delinquency, so the district budgets to receive 97 percent of the amount billed in the year it is due.

With uncertainty about the economic impact of the COVID-19 pandemic, that rate was cut back to 96 percent for the current 2020-2021 school year budget.

When Souderton Area School Board got a first look in January at what will become the 2021-2022 school year budget, the property tax on time collection rate was budgeted at 96.5 percent.

Tax collections have remained strong, though, Director of Business Affairs Brian Pawling said at the March 10 Souderton Area School Board Finance Committee meeting.

“I felt comfortable bumping that back up,” Pawling said.

Changing the expected collection rate for the 20212022 year back to 97 percent increases the amount budgeted to be received by $444,935, he said. The budgeted amounts for the earned income tax and real estate transfer taxes are also being returned to normal, adding a combined $250,000 to the budgeted revenue, he said.

The increased revenue projections, coupled with other changes including reductions to the amount of budgeted expenses for operations and pupil services, have cut about a million dollars off the gap between income and expenses in the latest version of the proposed 2021-2022 budget, he said. “Which is a good start. We have a lot more work to do,” Pawling said.

The latest numbers put the revenue at $5.7 million less than the $140.6 million of expenditures.

The revenue projections include a 3 percent tax hike, this year’s state cap, but after making additional adjustments to the proposed revenue and expenses in the budget, the board will also review the tax hike, Pawling said following the meeting.

The 2021-2022 budget must receive final approval from the board by the end of June. Staff retirements, additional adjustments to building or department budgets, healthcare costs, final numbers on state funding, charter school funding reform efforts and money received from the $1.9 trillion federal stimulus package are among the remaining things that will affect the budget, Pawling said.

“Preliminary numbers I’ve seen, we may be receiving close to $4 million from that money,” he said of the federal stimulus.

That will help the district’s budget, but can’t just be placed in the budget to fill the gap between revenue and expenses, he said.

“It won’t work that way because it’s one time money,” Pawling said.

“We don’t want to build that into our budget and then next year we have a bigger deficit because we used that $4 million to plug a gap on recurring costs,” he said. “We want to be careful that we use that money for one time costs.”