Board OKs $291M budget, tax hike

Property tax increase set at 2.85%

LANSDALE >> The 2021-22 budget for the North Penn School District is now on the books.

The school board voted unanimously to approve the budget, with a $5.8 million starting deficit smaller than one that has all but disappeared for the current year.

The budget includes a 2.85 percent tax increase, which is a $113 jump for the average district homeowner.

“We started the fiscal year with a $6.4 million deficit, approved last June. And it appears we are at pretty much break-even,” said district CFO Steve Skrocki.

“We are able to overcome that $6.4 million deficit, through increased revenues and spending less than was budgeted for. So that’s certainly good news,” he said.

Talks on the upcoming budget started with a board vote in December 2020 to stay within the the state’s Act 1 index of a 3 percent tax increase, followed by early drafts of the budget starting in January. That first draft started with a deficit of $15.5 million before any tax increase, while later drafts over the past several months have cut that deficit via various tax increase scenarios and spending of federal COVID relief money.

In May the board voted to advertise a $290 million preliminary budget with the 2.85 percent tax increase and with a deficit of $5.2 million, which district officials said were largely due to growing salary and benefit and charter school tuition costs. Those numbers had shifted slightly by early June, largely due to added incentives for retaining substitute teachers, and on June 17 Assistant Superintendent Todd Bauer read the final numbers:

“Recommend approval of the final budget resolution in the amount of $291,641,146 for the fiscal year beginning July 1, 2021, per the attached

resolution,” Bauer said, asking for formal action from the board.

Before the vote, finance committee chairman Christian Fusco thanked Skrocki and the district business he oversees for their work in developing, revising, and refining the budget.

After a unanimous vote to approve the budget, Bauer recommended and the board unanimously passed several related items, setting the 2021-22 homestead and farmstead exclusions at roughly $213 and passing departmental budgets for the community education, aquatics, school

nutrition services and extended care departments. Along with the extended care budget came a separate motion, to approve a $1.5 million transfer from the general fund to that fund to cover revenue lost due to COVID-19.

“All of these budget items have been thoroughly vetted in finance committee meetings,” said board member Jonathan Kassa, directing residents to posted documents and videos available for each department presentation.

“I want to make sure the public understands this has been publicly vetted — this is the end of a six-monthlong process,” he said.

Also budget-related and also approved by the board was a list of district-initiated

real estate tax assessment appeals to be filed by the district against various owners, and a set of six settlement agreements with owners who have been engaged in assessment appeals over the past year. Current district policy is to monitor all property sales within North Penn’s borders that take place within a 12-month period, and if they meet certain criteria for a discrepancy between the assessed value and the sale price, the district files an appeal to Montgomery County.

“For example, the first one on that list, the individuals paid $15.1 million for the property, but the implied value based on their current assessment is $8.4 million. Meaning, there’s a

$6.7 million discrepancy between a recent sale, and the implied market value for the property,” Skrocki said.

That property is listed as 880 Allentown Road in Upper Gwynedd and was sold to a “Dean Dairy Fluid LLC” in June 2020, according to a list posted in the board’s meeting materials documents; online listings indicate that is the address of Lehigh Valley Dairy Farms, now owned by Dean Foods. Other properties on the list have value gaps of $5.8 million, $4.9 million, $4.1 million, and $3.1 million, with others at smaller values.

“This indicates the property is not only underassessed, but dramatically underassessed. Hence, the reason for the appeal,” Skrocki said.

Board member Cathy Wesley asked if recently rising home prices could mean residential properties also make that list, and Skrocki said they could but not for the current batch.

“These are primarily commercial properties, although we do look at all properties,” he said. “We look at all residential, commercial, and industrial properties. The ones that meet the thresholds, on tonight’s list, are commercial.”

For the set of six settlements, Skrocki added, the net result is a roughly $19,000 payout to the various owners for taxes they have overpaid in prior years, but those settlement agreements also mean more tax revenue in the future.

“Moving forward, the total assessment increase is going to be $6.3 million in assessed value. So that translates into an additional $173,000 of revenue per year,” he said.

With the 2021-22 budget now approved, residents should receive tax bills on or around July 1. Anyone who does not get theirs by July 10 should contact their local tax collector, elected

in the various municipalities in the district.

“Unfortunately, failure to receive your bill is not an excuse for not paying your bill,” Skrocki said.

Applications are due by June 30 for the district’s real estate tax rebate program, which offers discounts to certain seniors and low-income residents. So far for 2020-21 over $100,000 in rebates have been issued to local residents, the first time the program has done so, and applications for the 2021-22 rebate can be made after July 1, Skrocki said.

And the 2021-22 budget was passed with a $200,000 placeholder figure for funding in basic education subsidies from the state, which Skrocki said could change if and when a state budget is approved.

“It appears there is a handshake deal regarding the state budget. Some of the details are still being worked out,” he said.