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School board cuts tax increase

May 29, 2003|By DON AINES

chambersburg@herald-mail.com

CHAMBERSBURG, Pa. - The Chambersburg School Board Wednesday voted to cut by more than half the real estate tax increase proposed by the administration for the 2003-04 school year.

The board gave tentative approval to a $65.9 million budget that includes a 1.42-mill increase in property taxes after an earlier vote maintaining a proposed 2.96-mill increase failed on a 4-4 tie.

For a property with a market value of $100,000, that represents an increase of about $24 in property taxes over the current year, compared to $50 with a 2.96-mill increase, according to Business Manager Rick Vensel.

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One mill equals $1 for every $1,000 of assessed value on a property. If approved, the new tax rate will be 58.21 mills, according to Vensel.

The 2.96-mill rate increase represented a 5.2 percent increase in the real estate tax rate. Director Michael B. Finucane, however, proposed limiting the tax hike to 2.5 percent.

"That's the average Social Security cost of living increase for the last three years and the last 10 years," Finucane said. Other school districts are using reserve funds this year to lessen the impact on local taxes, he said.

Finucane's motion included taking $367,900 out of the district's $3.2 million capital reserve fund and $421,400 out of its $2.9 million fund balance.

Board members Craig Musser, Thomas Orndorf, Stanley Helman and Fred Rice had voted in favor of Musser's motion to give preliminary approval to the budget as presented, with Finucane, Harold W. Fosnot, Penny W. Stoner and Eugene Gayman voting against the package.

"I hate to see programs suffer ... I don't see anything out of line in this budget," Orndorf said when Finucane proposed the idea.

"I like the idea, Mike, but I feel it's a little draconian to go that far," said Gayman.

Nevertheless, both men joined Musser, Helman and Stoner in supporting Finucane's motion. Fosnot and Rice cast the dissenting votes.

Musser also asked the administration to prepare a "top 10 list" of items that could be trimmed from the budget between now and final passage on Monday, June 30.

Possible areas for cuts could include not filling teaching, administrative and other staff vacancies, but that could mean larger class sizes, according to Superintendent Edwin Sponseller.

He also warned about looming increases in expenditures for which healthy reserves may be needed.

"Next year is when things get real tough" Sponseller said of the district's payments to the state retirement system. He said the district will pay $1.8 million more in the 2004-05 school year, about twice the increase for 2003-04.

Wage and salary increases will average 3.1 percent in 2003-04, but retirement contributions will increase 239 percent to $922,300, according to budget figures.

After relatively modest increases in health care costs because of a multi-year deal the district negotiated with its insurer, Vensel said an increase of 30 or 40 percent in premiums could occur when the deal expires.

One reason for scheduling the final vote so late is uncertainty over the state budget. Gov. Ed Rendell's earlier budget proposal would have resulted in the administration proposing a tax hike of 3.93 mills, but funding for public schools improved in his latest proposal.

Rendell's proposed tax reform plan, if passed, would mean a reduction of about $5.6 million in residential real estate taxes, which would be made up by and increase in the state's earned income tax rate.

The state also has until June 30 to pass its budget. State revenues for Chambersburg are projected to increase $1.2 million next year to approximately $24.7 million. Federal revenues are expected to total about $2.1 million.

Local revenues are projected at approximately $39 million next year, including about $30 million from real estate taxes and earned income taxes of about $4.5 million, according to a budget summary.

The largest segments of the budget include $30.2 million for regular instruction, $7.9 million for special education, $5.1 million for building operation and maintenance, $4.8 million for debt service, $3.4 million for transportation and $2.3 million for vocational education, according to the summary.

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