Property tax law could delay school opening in Chambersburg

October 09, 2006|by DON AINES

CHAMBERSBURG, Pa. - The Chambersburg School Board has set the maximum construction and project costs for the new U.L. Gordy Elementary School, but Business Manager Rick Vensel said the schedule for opening the school might be delayed by Pennsylvania's Act 1 school property tax law.

The board voted unanimously Wednesday to set the construction cost at no more than $16,005,959 and the total project cost at a maximum of $21,122,827. The difference between construction and project costs includes "soft costs," such as furnishings and equipment for the building, as well as site work, architectural fees and other expenses not directly related to construction, Vensel said.

The school is to be built on the same site as the existing U.L. Gordy on Miller Street.

For the school to open at the beginning of the 2008-09 school year, the project has to receive the necessary approvals from the Pennsylvania Department of Education within a few months, he said.


Without the state approvals, the project could be delayed "months, possibly a year," Vensel said.

Act 1 allows shifting some local revenues away from real estate to either an earned income tax or a personal property tax. A local tax study commission recently was appointed by the board to recommend how that should be accomplished, and district residents will vote on the plan in the May 15 primary.

The law also requires the state's 501 school districts to have preliminary budgets ready by February. In the past, preliminary budgets were usually presented in April or May with the deadline for final approval June 30.

Under Act 1, how much real estate taxes may be raised will be limited to an inflationary index set by the state.

If a district proposes a tax increase above that level in its preliminary budget, it has to be approved by voters in a so-called "back-end" referendum, also May 15.

There are a number of exceptions in the act to the cap on property tax increases but, Vensel said, districts have to get approval from the Department of Education to avoid a back-end referendum. Those requests for exceptions have to be received by the department in January, he said.

"You won't want to approve a building project unless you have the money to construct it," Vensel said. Hundreds of districts might be seeking exceptions at the same time, further delaying the process, he said.

"It adds another tier of bureaucracy to the process," Vensel said of the Act 1 requirements. Schools have never before had to get Department of Education approval to raise taxes for construction, he said.

The Herald-Mail Articles