Pennsbury: Projected deficit could bring $457 tax hike

From the BCCT.

But...but...Pennsbury has always been the shining salvation of Morrisville! How can this be???

Projected deficit could bring $457 tax hike
A projected 10 percent tax increase may force a public referendum, the first in Bucks since state Act 1 went into effect.

Taxpayers may have to shell out extra money to overcome a $12.6 million deficit in Pennsbury.

Conservative projections point to a $457 tax increase for the average homeowner.

That’s a nearly 10 percent increase, well above the statemandated 4.1 percent, said Isabel Miller, the district’s business administrator. Unless the district whittles down expenses and finds ways to pump up revenues, going over the threshold would mean the first public referendum on a tax increase in Bucks under new state legislation.

For a homeowner with an average district property assessment of $31,304, the tax bill would be $4,996.

“At this point in the budget process, it is premature to use that hypothetical number because it represents an impact that will not occur,” said district CEO Paul Long.

In this early version, several pieces of required information are still vague, such as revenue from gaming funds, state grants and federal funding, said Miller.

Since the budget is in its formative stages, Pennsbury is planning 16 different measures to save costs. They include a transportation review to make busing more efficient, taking over classes that are traditionally provided by the Intermediate Unit, finding efficiencies in the high school schedule and consolidating building use during summer and other vacation periods.

Districts can apply for state exceptions, which would allow them to raise taxes above the 4.1 percent index to pay for certain less controllable costs such as special education.

The deficit is due in part to an expected drop in revenues from real estate taxes. In the current economic situation, the district expects interest rates on its investments to be low as well.

A conservative estimate shows a $2.6 million decrease in total local revenues, said Miller at a budget presentation before Thursday evening’s board meeting.

Total revenues will likely drop $6.7 million from this year, she said.

Expenditures will increase by about 3.4 percent, or about $5.9 million. Miller said that figure is encouraging because the 2008-09 earliest budget draft reflected a nearly 6 percent expenditure increase. More importantly, this year’s final budget still ended up with an expenditure increase of 3.3 percent, she said. The district still has time to lower expenses until the final budget has to be approved May 14.

“But it’s harder this year to cut expenses because there isn’t much left to cut without affecting programs,” Miller added.

The rise is fueled in part by salaries, which the district calculated at 4.3 percent higher, and benefits, which may rise by 6.1 percent. Total salaries and benefits are anticipated to be about $135 million.

Recently the teachers union and the school board reached a tentative agreement to forgo raises and extend the current contract, pay scale and benefit package another year.

Planned renovations for Makefield Elementary School and other projects may also fuel expenses.

At this point, the budget does not take into account the fund balance. The district savings account is projected to carry about $2.4 million into next year, but that number could change, said Miller.

The public is encouraged to attend budget committee meetings, board member Gene Dolnick said at Thursday’s meeting.