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Tuscarora schools struggle with Act 72

January 22, 2006|By DON AINES

chambersburg@herald-mail.com

MERCERSBURG, Pa. -

As the Pennsylvania House and Senate debate the merits of their respective school property tax relief proposals, the Tuscarora School Board is dealing with the realities of Act 72, the tax relief plan passed in 2004, but rejected by most of the state's 501 school districts.

The Tuscarora School Board in 2005 voted to opt into Act 72, along with 110 other school districts. It is the only one of the six school districts in Franklin County, Pa., to adopt Act 72.

"We face the first-ever public referendum in May," Superintendent Thomas Stapleford said.

Under Act 72, school districts that pass preliminary budgets raising property taxes above an inflationary index set by the state have to submit the budget to voters for their approval.

The law allows the district to raise taxes 5.1 percent this year without going to a referendum, which Stapleford said would bring in about $600,000 in additional revenue. The problem, he said, is that health-care costs alone will increase more than $800,000 in the 2006-07 budget.

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Stapleford said the district also faces $550,000 in construction debt that the board believed would be exempt from the inflation cap. The state Department of Education "essentially changed the interpretation of Act 72 and construction debt is not exempt," he said.

The district faces $1.2 million in costs above what it could raise under Act 72's inflation cap, Stapleford said. At this point, the administration needs to raise taxes about 13 mills to balance the budget, he said.

State subsidies to school districts will not be known until near the end of the fiscal year on June 30 or later, Stapleford said. The budget the administration is preparing, therefore, makes no provision for increased state funding, which could shave a few mills off that increase, he said.

District homeowners also cannot expect any property tax relief this year in the form of gaming revenues because no slot machine parlors have opened yet, he said.

If the voters do not approve the budget in May, the district will have to cut programs and personnel to balance its budget, he said.

Before Act 72, districts had until June 30 to approve a final budget. Tuscarora's school board, however, will meet Monday night to review a draft of the budget, which has to have preliminary approval by Feb. 15 and be certified to the state by Feb. 20, Stapleford said.

A decision by the state on whether the budget will be subject to a referendum in the May 16 primary has to be made by March 7 if it is to be placed on the ballot, Business Manager Rick Kerr said. If the state adopts a new tax relief plan, Act 72 will be abolished and the district will be subject to the requirements of the new law, he said.

"For better or for worse, that's what Harrisburg calls tax reform," Stapleford said. "Until the legislature is willing and able to step up and shoulder the state's burden for education, I won't call it reform."

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