Prior to the Act 1 school property tax relief law being passed, districts did not need budget approval from the state. Since 2007, the state has assigned each district an adjusted base index, the amount it can raise taxes each year without having to go to voters for approval through a referendum.
The adjusted base rate for Chambersburg in 2009-10 is 4.9 percent, Dart said.
"Right now, we're evaluating some of the exceptions (to Act 1) for special education and construction," Dart said. If the exceptions were approved by the state, Chambersburg then could raise taxes above the 4.9 percent cap, he said.
Each district receives an index rate based on inflation, state aid and other factors, Dart said. Of the nine districts in Franklin and Fulton counties, Chambersburg's rate is the lowest, while Forbes Road and Southern Fulton are the highest at 5.8 percent each, according to the Department of Education.
Chambersburg applied for exceptions in the 2008-09 budget, but ended up not using them, said Sylvia Rockwood, director of information services.
Dart said as of the end of that month, earnings on investments were $90,261, while the district had projected earnings for the year at $861,276. In 2007-08, earnings on investments exceeded $217,000 by the end of November and the year ended with earnings of more than $625,000, according to figures from the December Finance Committee report.
A slow real estate market also has meant much lower revenue for the realty transfer tax, a 0.5 percent tax to the district from property sales. By Nov. 30, 2007, collected revenue was $837,468 on the way to a total for the year of more than $1.7 million. The district projected $1.5 million from the tax in 2008-09, but had collected $531,763 as of Nov. 30.
Superintendent Joseph Padasak said last week those investments and transfer taxes make up only about 2 percent of the district's $102.8 million budget.
As of Nov. 30, the district had collected almost $40 million in real estate taxes, more than 6 percent of what was expected for 2008-09, the committee report stated.
How earned income taxes fare in 2009-10 could be affected by factors including the unemployment rate in the region and whether businesses are able to increase wages or offer cost-of-living increases to their employees. From November 2007 to November 2008, the jobless rate in Franklin County rose from 3.1 percent to 5.1 percent.
The instability in financial markets last fall also changed the district's plans for borrowing money to complete the reconstruction of Chambersburg Area Senior High School and the Franklin County Career and Technology Center.
When the financial markets seized up in September, the school board postponed authorizing the sale of $45 million in bonds to pay for construction, Dart said. Instead, the district sold a $10 million bank-qualified bond issue to take advantage of lower interest rates, he said.
Depending on what interest rates do this year, the district could authorize the sale of bonds for the remaining $35 million this spring or summer or break up the borrowing again. Dart said.
At this point, the district has access to enough money to continue construction on the $74 million high school project into July or August before needing to borrow more, he said.