Chambersburg school officials leery of tax reform plan

March 11, 2004|by DON AINES

CHAMBERSBURG, Pa. - If property tax reform in Pennsylvania includes a provision for budget referenda, school district residents may find themselves voting on budgets at the same time they are casting ballots for politicians.

Chambersburg Area School District Superintendent Edwin Sponseller told the school board Wednesday that a letter about the so-called "back-end budget referendum" the board sent to state legislators recently resulted in several responses.

"They're dead set against the back-end referendum, but they suspect it will be bundled in with legislation relating to property tax reform" that they will be compelled to vote for anyway, Sponseller told the board.


The Pennsylvania School Boards Association opposes the referendum provision, which would require budgets be approved by the voters at the spring primary if a budget exceeds an index based on the average increase in the Statewide Average Weekly Wage and the Employment Cost Index. Over the past six years, the increase in that index has ranged from 2.6 percent to 4.2 percent a year, according to the association's Web site.

If the index increased 3 percent in a year, a district would not be able to increase property taxes more than 3 percent without voter approval, according to the association.

Sponseller's written report to the board stated that spending for capital projects, such as new schools, "would not be exempt from this calculation.

School districts run on a July 1 to June 30 budget, but Business Manager Rick Vensel said the back-end referendum would require districts to have draft budgets ready for public scrutiny by January at the latest. Budgets are typically passed in June.

"We would have to have the budget prepared in advance of the governor's state budget announcement" in February, Vensel said. "It is an impossible, undoable timeline," he said.

"A referendum has the potential to more radically change the face of public education than anything in Pennsylvania history," Vensel said.

It is called a back-end referendum because, if the bill becomes law, district residents would first have to approve a referendum in a November general election agreeing to increase local income taxes to be combined with state funding to reduce school property taxes, according to the association.

The tax reduction components of the bill, according to the association, "rely solely on revenue from the expansion of gambling in the commonwealth." The association's position is that revenues from slot machines could vary widely from year-to-year.

With the district facing soaring health-care costs, Vensel said increases in that alone could mean the district would exceed the index and require a referendum. He said the district could be looking at an increase in Blue Shield premiums of 23 percent to 46 percent in 2004-05. The district now pays about $5 million a year for health-care coverage.

"The majority of a school district's budget is locked into fixed costs that are not discretionary," the school boards association said. Those include retirement system contributions that have increased rapidly in recent years, along with health care and special education costs.

The impact of referenda will be determined in part, by what exceptions are allowed, according to Vensel.

"Who knows what they will exclude from the law," he said.

The Herald-Mail Articles