School districts to reopen budgets and factor in state subsidy
Although most local school board approved budgets for the 2002-2003 school year, their final say on the spending plans is yet to come. They had until June 30 to approve their final budgets, and several raised taxes; however, lawmakers took more time than usual making a decision on the state’s own budget and gave out a little more than the school boards expected.
Most local school officials guessed at how much state money their districts would receive. They knew they would get at least as much as they did last fiscal year, but they were uncertain about the annual increase over the base rate.
Those that guessed now have to go back and adjust the budgets to reflect exactly what the state has doled out.
“They have to reopen their budgets sometime this month and they have to make a decision as to how to use the additional money,” said Jeff McCloud, a spokesman for the state Department of Education.
McCloud said school boards have three choices: They can use the funds to reduce taxes, pay off debt or restore funding to any educational programs they reduced or cut.
McCloud said the process is the same whether or not a school board raised taxes.
“Every school district has to reopen its budget,” he said.
Connellsville Area School District officials are among those trying to determine where to earmark the additional state funding.
“I’m trying to come up with a number of scenarios for the board to look at,” said Bill Harper, the district’s business manager. “There are only certain ways we are permitted to spend it, so there won’t be a whole lot of choices.”
Connellsville, along with other county school districts, received modest increases in their respective state subsidies, averaging about 3 percent.
However, only 2 percent of the 3.3-percent increase given to Connellsville was factored in when the school board passed the 2002-2003 spending plan two days before the state approved a budget.
“It would be nice if we could have this type of information three or four months in advance, instead of after the fact,” Harper said.
The ultimate increase was substantially higher than what the school district expected, Harper said.
“For months we were being told the governor wasn’t going to move any higher than the 1 percent he had offered in the budget,” Harper said. “The General Assembly, however, was prompted to seek more, but I didn’t see it going more than 2 percent.”
Harper said the most favorable option providing a long-term effect would be to apply the extra $313,000 to reducing debt service.
“This will give us a better-looking balance sheet,” he said.
Harper indicated that a tax rebate or credit would cost the district nearly three times more than the amount it will receive from the state: “We’re in the process of having the tax bills made up. …It would be a clerical nightmare and be more expensive to the district overall if we were to do that at this time.”
Harper added that programs remained intact, despite the initial $1.7 million budgetary shortfall.
Last week, the board narrowly passed a 3-mill tax increase and will withdraw $1 million from its fund balance to balance the budget.
The board has no plans to reverse the tax increase, Harper said.
“We can’t do that,” he said. “This year we were lucky to receive the extra money. The state used their rainy day fund to do that. There is no rainy day fund to rely on next year.”
Harper said that, at the July 9 planning session, he plans to present the board with his recommendations on how it should use the additional state funding.
“I expect they will vote on it at their regular meeting on July 10,” he said.
Laurel Highlands School Board may be the only one in the area that is actually done with the process.
The board waited until the last minute to adopt a budget for this fiscal year, exceeding the deadline by passing the spending plan July 2.
The directors wrestled with a lean budget and wanted a firm figure from the state before they inked the plan. It paid off, because they worked in the planning process with a 2-percent increase from the state and actually received 2.7 percent, or $78,553, more than expected. Taking the added revenue along with a few more cuts into expenses, the board passed a $31 million budget with a 5.45-mill tax hike. They had previously considered increasing taxes by as much as 6.36 mills.
Uniontown Area School Board balked at the 2.85-mill tax hike presented them and wrangled right up to the final vote June 28 on trimming that to a 2-mill increase. They approved the 2 mills after taking about $118,500 from money set aside for potential legal judgments.
District officials had factored in a 2-percent increase in the state subsidy, and Uniontown actually received a 2.4-percent increase.
Business manager Floyd Geho said he was surprised at how much more than Uniontown some school districts received in the region and even that Uniontown received the lowest increase in Fayette County.
He said the added $47,000 does not mean much overall to the $31.9 million budget.
“That would only be one-third of a mill,” he said.
Geho said he would like guidelines on how to factor in this change, although he said reopening a budget is not difficult and is a matter of paperwork more than anything.
Belle Vernon Area School Board also raised taxes this year, adopting its budget before the state figures came out.
Business manager Eileen Navish said they banked on a 1-percent increase from the state but ended up with a 2-percent increase, or about $72,000 more than they expected.
Superintendent Dr. Charles Chandler Jr. said school officials took the conservative route, although they felt confident they could get more than the 1-percent increase Gov. Mark Schweiker initially proposed.
“We wanted it in writing,” he said.
Chandler said it would be up to the school board to decide how to use the added state money.
Belle Vernon’s $24.4 million budget included a tax increase of 9.41 mills for Rostraver Township, 9.33 mills for North Belle Vernon Borough, 10.24 mills for Belle Vernon Borough, 10.32 mills for Fayette City Borough and 12.25 mills for Washington Township.
The increase from the state to the local school districts ranged from the 2 percent that went to Belle Vernon to the 4.9 percent that went to Carmichaels Area School District.
Carmichaels’ directors held the line on taxes, falling back on a portion of their fund balance.
Superintendent James Zalar said he had yet to get formal word from the state on the school district’s subsidy but knew the school board would have to reopen the budget.
“We never did that before. I’m sure there’s going to be guidelines,” he said.
Zalar said the $10.99 million budget accounted for 1 percent more from the state, and he does not know how the school board may decide to use the extra funds.
Although residents in several local school districts will see changes in the amount of taxes they pay, those in Fayette County are awaiting the completion of the countywide property reassessment, which will change the way tax bills are calculated.
However, school tax bills for the 2002-2003 year will still be based on prior assessment figures and not on the new assessment values that property owners recently received in the mail. So, multiplying a new assessment value with the current millage rate would result in an inaccurate and over-inflated tax bill.
The millage rates in Fayette County school districts will decrease in the 2003-2004 fiscal year to reflect the county’s new property assessment schedule.