From the BCCT.Low revenues, high costs will have impact
The only way to keep school services at a high level may be to increase taxes, said board President Gregory Lucidi.
By MANASEE WAGH
Pennsbury schools can expect to see lower revenues and higher expenses next year. Taxes likely will rise to cover the shortfall, though it’s too early to predict those numbers since the administration is still shaping the preliminary budget. The district projects a $178.3 million budget for 2009-10. However, some estimates in the current budget calculation probably will change in the near future, said Isabel Miller, the district’s business administrator. The first draft of the 2009-10 budget will be presented to the board budget committee on Jan. 15.
On Thursday night, Miller and Joanne Godzieba, Pennsbury’s director of financial services, told the school board the district likely will be affected by the financial crisis sweeping the country.
All districts have been paying more in fuel costs, and the crashing housing market means many people probably won’t pay their real estate taxes on time, Godzieba said, adding Pennsbury anticipates not collecting transfer taxes on house sales, either. District investments probably won’t yield much because of dropping interest rates, she said.
Staff salaries and benefits total $87 million, comprising about half the current budget. Based on teacher contract estimates, next year’s budget may see a salary and benefit increase of $4.1 million, according to the district. Overall, financial administrators predict the district may spend about $2 million more than it makes next year. That amount would have to be covered by the fund balance, a district savings account that continues from year to year.
However, savings may shrink further, administrators said, because revenues from federal, state and local sources likely will be flat or even decrease.
“If we want to keep services at the current level, the only option is an increase in property taxes. That is something the board is very sensitive about, and we will work very hard to keep those increases to a minimum,” wrote school board President Gregory Lucidi in an e-mail exchange Friday.
The maximum amount the board could raise taxes is 4.1 percent without seeking voter approval, according to the state’s Act 1 mandate.
“Continuing to raise taxes is just not an option,” said board member Linda Palsky at Thursday’s meeting.
The district files an annual financial report and outlook every year as a state Department of Education budgetary process requirement. The board and the administration began talking about this year’s budget in July and needs to adopt a preliminary budget in February.
