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Schools budget to recommend tax increase

March 13, 2002|BY STACEY DANZUSO

A proposed tax increase of up to 7 mills will be included in a tenative spending plan that the Chambersburg Area School District Superintendent will present to the school board next month.

"It will be a tentative budget that will carry with it a tax increase. If the board would not agree to a tax increase, we will have to cut something," Superintendent Edwin Sponseller said Monday. "And 70 to 80 percent of a school district's budget is personnel."

Sponseller will present the tentative 2002-03 budget to the school board April 10.

Sponseller in January predicted a 7 mill tax increase would be needed to avoid a $3.2 million deficit in the fiscal 2002-03 budget. Since then, he said, a 1 percent increase in state funding and a $400,000 cut in capital improvement projects have improved the financial picture.

"We are still refining the numbers," he said. "It is more serious than I can remember. But there is the potential to get a lot less serious."

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He said he is keeping his fingers crossed that legislators will find more money for local schools in the state budget.

Raising property taxes by 7 mills would increase the average taxpayer's bill by 13 percent, or about $120 a year, Sponseller said.

A mill equals $1 for every $1,000 of assessed property value. Each mill would cost the average taxpayer $17.20. If the school board passes the 7 mill increase, that would bring the average taxpayer's total tax bill to about $1,054 this year.

Unanticipated new costs like funding cyber school students and an increase in the retirement rate have pushed spending in the Chambersburg Area School District up by 6.1 percent this year, he said. Less state money and interest income mean revenues are only 0.4 percent higher, he said.

One major increase was the state retirement rate, which will cost the district $790,000, or 517 percent more than last year.

That alone accounts for 1.62 mills, he said.

"We were told when the retirement bill passed last year there would be no significant increase for 10 years," he said.

Sponseller is including $250,000 in the budget for charter cyber schools, a new expense mandated by the Charter School Act. He said the district has 39 students enrolled in cyber schools.

Blue Cross Blue Shield payments may go up 10 percent, and tax income may go down as several businesses in the borough challenge their tax assessments.

The school district is awaiting a decision in Franklin County Court on the tax appeal of the senior living community Menno Haven, Business Manager Rick Vensel said.

Salary and related retirement, workers' compensation and Social Security will increase by $1.2 million, or 2.52 mills, based on an estimated 3.5 percent increase in salaries, which is part of negotiated contracts, Sponseller said.

The new budget will have to make up for the $220,701 shortfall of the current fiscal year. Sponseller said the budget was unbalanced because school board members approved only a 2.5 mill increase instead of the 2.95 mills recommended.

While expenditures are up, the school district expects only a slight increase in revenues.

The governor recommended a 1 percent increase in base education subsidies and a 1.5 percent increase in special education in his budget address, Sponseller said. Local schools normally get a 3 percent increase, he said.

The recommended increase will bring an additional $202,000 to the district.

The district's building and grounds committee cut capital improvements from $700,000 to $300,000 by delaying a paving project at Fayetteville Elementary School, not purchasing gym dividers at Chambersburg Area Middle School and not resurfacing the track at J. Frank Faust Junior High School, Vensel said.

"They left in projects considered safety issues or issues (that) if not repaired at this point would cause more damage and end up costing more," he said.

In anticipation of the deficit, Sponseller has recommended that certain positions left vacant by mid-year retirements remain open or be staffed by substitutes or transfers.

Of 17 positions from aides to secretaries, five remain open, five were filled and others were staffed with substitutes or transfers this winter, he said.

The school board will have one month to consider the budget Sponseller presents next month before adopting a tentative budget. Final adoption will be in June.

"The unknown for me will be how much the board will increase local real estate taxes," he said. "I hope they recommend a tentative budget that will maintain existing programs for students, but that will include a tax increase."

Sponseller said he will work to sell the tax increase to the board and the community.

"I can only hope it will be considered a unique year, and that the community will understand," he said.

The budget is not on the agenda for tonight's school board meeting, but Sponseller said it might come up during the public comment period. The meeting is at 7:30 p.m. at the Chambersburg Area School District Administrative Office, 435 Stanley Ave.

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