Preliminary budgets due in January for exemption seekers
Area school districts, faced with ballooning retirement and health care costs, are taking a first look this month at how much property tax increases might be for the 2012-13 school year.
The school districts are estimating potential millage rate increases allowable under Act 1, which caps the amount schools can raise property taxes to the rate of inflation. Under the act, a base index is determined by averaging the percent increases in the Pennsylvania statewide average weekly wage and the federal employment cost index for elementary and secondary schools. However, that rate is adjustable for certain school districts that have higher market value/personal income aid ratios.
Last year, the index was the lowest since the inception of the program at 1.4 percent. For the 2012-13 school year, the index increased slightly to 1.7 percent. School districts that need additional revenue can apply for exceptions to increase the millage beyond the rate of inflation percentage, but school districts that do not receive approval must hold a referendum vote for further increases.
Several school districts this year have passed resolutions to not exceed the index in 2012-13.
Upper Perkiomen School District, which faces an adjusted index of 2 percent, on Jan. 5 voted to stay within its index. A 2 percent increase would translate to an additional .439 mills.
District Business Administrator Sandy Kassel noted that the district has stayed within its index for the last several years. For the 2011-12 school year, the millage increased to 21.9521, which was within the 1.7 percent adjusted index for that year.
According to Kassel, the projected millage rate increase and other budget numbers for the 2012-13 school year are not yet available.
The Southern Lehigh School Board at its Dec. 5 meeting also voted to keep tax increases to within the 1.7 percent index, which would translate to an additional .77 mills. Southern Lehigh Business Director Jeremy Melber said that it is still too early to say whether the district will need to increase the millage to that rate or whether it will be lower.
Last year, the board applied for an Act 1 exception to raise the tax rate by .25 mills, bringing the current millage to 45.55.
The Boyertown School District index is also adjusted and stands at 2.1 percent for the 2012-13 school year. However, Business Affairs Director Dave Szablowski said the district is seeking an exception to raise the millage beyond the adjusted index.
According to Szablowski, while budget talks are still in preliminary stages, the district likely will seek an increase closer to 5 percent or 1 mill. He said the increase is necessary because of rising health care and retirement contribution costs, noting that taxes likely would have increased more if the district had not been able to negotiate a two-year pay freeze for its staff.
Boyertown also exceed the index last year, raising the millage by 5.5 percent in Montgomery County to 21.47 mills and by 5.2 percent in Berks County to 21.85 mills.
The school board will review the preliminary budget Jan. 17 at 6:30 p.m. and adopt a 2012-13 preliminary budget on Jan. 24 at 7 p.m.
In Souderton, the school district received exceptions to increase the millage by up to 5.1 percent, or 1.4 mills, according to substitute Director of Business Affairs Sylvia Lenz. As the 2012-13 preliminary budget currently stands, the school district would further exceed that limit and need to cut about $700,000 from the plan, Lenz said. However, she noted that any increase likely will be less as the school board decides which exceptions to accept or reject.
Last year, Souderton received approval to increase the millage by 4.87 percent, or 1.26 mills, to 27.19. The school board will hold a special meeting Jan. 18 to adopt a preliminary budget for the 2012-13 school year.
Quakertown also kept tax increases within the index last year, raising the millage by 1.88 mills, or 1.36 percent, to 140.25 mills. This year, however, could present a different picture. According to the $93.6 million preliminary draft budget unveiled Jan. 5, the millage rate would increase by 3.02 percent to 144.48 mills. Quakertown received one exception from Act 1 for retirement contributions, which would allow the district to increase the millage by 3.09 percent without voter approval.
A 3.02 percent increase in the millage rate would mean that taxes would increase by $112 to $3,801 for a homeowner with the average assessed property value of $26,308.
According to Superintendent Dr. Lisa Andrejko the increase would be necessary to address a $1.6 million increase in retirement contributions for the district. However, Andrejko emphasized that those figures only represent a first look at a potential 2012-13 budget and the actual rate of increase likely will be much less.
“We have always had reductions between the preliminary and proposed budgets,” she said, adding that it is still “too early to get any concrete numbers.”
The preliminary budget will be unveiled at the Jan. 24 school board meeting.