AG passes preliminary budget, applies for Act 1 exception
YORK RUN — The Albert Gallatin Area School District will apply for an exception to exceed the state index for millage as one option to help close a $3 million shortfall in the 2019-20 school budget.
The board Wednesday passed a $55.8 million preliminary for next school year before agreeing to petition the state Department of Education (PDE) for an exception that would allow it to raise the real estate tax above the Act 1 index set by the state.
The 2019-20 index is set at 3.4 percent for the district, meaning if the exception is granted, the district would be allowed to raise the millage rate by more than 3.4 percent.
The district is requesting an exception due to high costs incurred in providing special education programs.
Both the preliminary budget and the application for an Act 1 exception passed on a 7-2 vote, with school directors Charity Grimm Krupa and Ryan Porupski voting against each measure.
Krupa expressed concern with the district being a similar situation as a year ago when it considered a tax increase to cover a deficit but opted to cover the shortfall using its fund balance.
Last year, the board applied for and was granted an exception but opted not to raise taxes. It is a move the board will have to consider again this year as it faces another deficit.
“We have spent $2 million more in this school year alone than what our revenues were from this school year,” said Krupa.
“Part of my concern is last year at this time…we talked about that if we weren’t going to raise taxes, we needed to take a hard look and cut expenditures and that’s not happened. I think I’m still in the same position that I don’t want to raise taxes, but we can’t keep down the road we’re going or we’re going to bankrupt the district,” she said.
Porupski said he voted against the measures due to the board failing to hold a meeting originally planned for February to review the district’s finances.
District business manager Denise Sheetz said revenue generated by a millage increase beyond the index would cut the budget shortfall to $2.5 million, the remainder of which could be covered by the district’s fund balance, which is anticipated to be $2.7 million at the end of the current fiscal year.
A millage increase of 0.8679 mills would generate $509,471 in additional tax revenue, Sheetz said.
The district’s millage rate is currently set at 14.935 mills.
Sheetz said the district could opt to raise the tax rate to the index, or not at all.
“We have to stress that (applying for an Act 1 exception) doesn’t mean that the board will raise taxes or that they’re required to raise taxes by doing this. It’s just to allow us the option,” said Sheetz.
A tax increase to the index would raise the millage rate by 0.5077 mills and generate $298,028 in additional tax revenue.
However, Sheetz said, the board hopes to avoid a tax increase by curbing expenditures.
“This is very preliminary, and we’ll continue to look at our expenditures to try to cut before we consider a tax increase,” Sheetz said.
The preliminary budget is an increase of $1.4 million, or 2.6 percent, over the current-year budget of $54.4 million.