From the BCCT.
Kudos to Rep. Galloway for hearing the outcry and starting a legislative response.
Sen. McIlhinney believes "the state needs to do something." That's a bold call for action..NOT. Even our school board members think the state should so something. The difference here, sir, is that you're one of the ones who is a "do-somethinger" in this mess. Let's get your do-something machine in gear sometime this decade, if you would?
Contact Senator Chuck McIlhinney (R-PA 10th) and Representative John T. Galloway (D-PA 140th)
Galloway: Pensions a 'snowballing crisis'
By: JAMES MCGINNIS
Bucks County Courier Times
The pension fund for school employees reported a loss of $1.7 billion. The fund for state workers said it lost $11 billion.
The global recession has only added to a "snowballing crisis" with state pensions and, without a special commission, it's only going to get worse for taxpayers, state Rep. John Galloway, D-140, said Thursday.
Galloway has joined a long line of Pennsylvania lawmakers to ring alarm bells over two pensions - one for Pennsylvania's teachers and the other for all state workers. He sent a letter this week to the speaker of House of Representatives, calling for a commission on the pensions.
Each fund lost billions of dollars in 2008 and, unless the economy turns around, Pennsylvania could be forced by law to raise taxes to support those funds in 2012, lawmakers said.
The Pennsylvania School Employees Retirement System reported a loss of $1.7 billion in 2008. There's about $60 billion left.
The state workers pension fund reported a loss of $11 billion, leaving $24 billion in the fund at the beginning of 2009.
Galloway said he believes the traditional legislative process of sending such matters to a committee for research and consideration simply wasn't going to work this time.
"I think the problem is so large - it's not something that we can just deal with in committee," he said. We need to act on this, and a (traditional) committee might never even come to the floor (of the House).
"A speaker's commission would bring in all the different committees and put more pressure on us to act," Galloway continued. "We're getting a lot of pressure to just do nothing and wait and see if the economy can just turn this around."
"But what if it doesn't?" Galloway said.
State Rep. Scott Petri, R-178, said he "would not oppose anything that brings more attention and urgency to this problem. Waiting and knowing, and just letting it stew is not resolving it.
"Before the recession, it looked like we were starting to build a way out of this hole - at least a way to make the hole smaller," Petri added. "But then the economy made a turn for the worse."
A number of state lawmakers are trying to secure federal stimulus funds to try and plug that hole, Petri added.
While he would support a speaker's commission, state Rep. Tony Melio, D-141, said lawmakers can't seriously consider any ideas that cost Pennsylvania more money.
"We had a meeting with the appropriations chairman, who told us that we just don't have any money and we can't spend any more money," Melio said. "Until we get the stimulus fund figured out, we just can't do anything."
State Sen. Chuck McIlhinney, R-10, said he supported the need for a special convention on the pension and considers it a crisis. The state needs to do something, he said.
State Rep Gene DiGirolamo, R-18, was less certain of the need for a speaker's commission and he disagreed with Galloway's remarks about the committee process.
"I don't know if I agree with the idea that if it goes into a committee that it would just die in there. I think the committees would have to be part of this process also.
"Whether this is a crisis or not is going to depend on the economy over the next couple of years," DiGirolamo continued. "It's something that we certainly should be studying. What he's proposing - I'm not sure if that's the right approach."
The Pennsylvania school pension fund serves more than 600,000 current and former school employees in Pennsylvania, according to its Web site. The Pennsylvania State Employees Retirement System has about 219,000 members, officials said.
Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts
Friday, May 1, 2009
Monday, April 27, 2009
Pa. struggles to craft budget
From the Inquirer.
With economic forecasts dire, Pa. struggles to craft budget
By Amy Worden and Angela Couloumbis Posted on Mon, Apr. 27, 2009
Inquirer Harrisburg Bureau
HARRISBURG - With a new state revenue report likely to deliver more bad news this week and a budget deadline looming, legislative leaders are buckling down to craft a spending plan amid a dire economic climate.
If the first quarter is an indication, April revenue figures - usually among the year's strongest because of tax payments - will come in hundreds of millions of dollars below estimate.
So far this year, revenues have lagged nearly 8 percent below estimate, adding to the struggle Gov. Rendell and lawmakers are facing to close a widening shortfall in the state's current budget ahead of the June 30 deadline to enact the new one.
The current shortfall is $2.6 billion, up $300 million from just two months ago.
"I'd say Pennsylvania is pretty typical in the problems that it's encountering, but certainly a lot of states are much worse," said Corina Eckl, fiscal program director for the National Conference of State Legislatures.
The conference last week released a report that found states would have to address a cumulative $281 billion budget gap that would continue to 2011, and likely beyond.
While Pennsylvania's shortfall is still smaller than those of some states, including New Jersey at $3.3 billion, continued slumping revenues might force further cutbacks.
So far, Rendell has avoided drastic measures that other governors, such as California Gov. Arnold Schwarzenegger, have had to take: notably, ordering state employee furloughs and closing state offices.
The Rendell administration and the state's largest public-employee unions reached a tentative agreement earlier this month to avoid furloughs. Under a cost-cutting plan, the state would temporarily reduce its contribution to the fund that administers worker health-care benefits by 20 percent over the next 15 months, at a savings of $200 million.
Meanwhile, Senate and House leaders from both parties have been meeting to reach an agreement for next year's budget despite being split by ideological differences: Democrats say some tax increase will be necessary along with program cuts, while Republicans are adamant about deeper cuts and no additional taxes.
"We think under the Rendell proposal that we can balance the budget for the next four years," said Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Committee. "We're looking at a $10 billion problem in four years if nothing is done."
In his proposed $29 billion state budget unveiled in early February, Rendell said he wanted to increase spending for education and health care, while proposing limited taxes to cover shortfalls, such as an increase in the cigarette tax and new taxes on smokeless tobacco and gas drilling. He also proposed legalizing video poker as a way to help community college students cover tuition costs.
The governor has not proposed raising broad-based taxes such as income or sales, and wants to cut the rate of the capital stock and franchise tax that businesses pay.
Evans said the final budget would need to use a full menu of funding sources, including roughly $10 billion in federal stimulus dollars expected to flow into Pennsylvania over two years.
While recognizing cuts must be made in many areas, he said, he supports the governor's new investments in education and health care and will fight to preserve them.
"There will have to be compromise," Evans said. "Everything is on the table."
It will have to be to get the support of Republicans who control the Senate.
In an interview last week, Senate Majority Leader Dominic Pileggi (R., Delaware) said his caucus' problem with Rendell's proposed budget was basic but critical: His members do not agree with the spending level the governor is advocating.
Pileggi said his caucus wanted to make sure that the state wasn't unduly relying on the influx of federal stimulus dollars - which will last for only two years - to make ends meet. He said lawmakers needed to "look out at least to a three- or four-year horizon" and make sure that whatever state spending was approved could be sustained even when the federal money ran out.
"The stimulus money presents both a benefit in the short run, but also a trap in the long run if not used properly," Pileggi said. "We could be in a position where, if we think only in the short term, we are faced with the need for a drastic tax increase or the need for a drastic cut in services when the federal stimulus funding expires."
Right now, Pileggi said, "there is no support in our caucus for the spending levels established in the governor's budget proposal." He said his caucus was scouring the budget line by line to come up with "spending levels that are sustainable" and hoped to have that alternative complete in the next three weeks.
"Whether the governor and the [Democratic] leadership in the House are able to accept that product or agree to that remains to be seen," said Pileggi.
Other Republicans opposed to any new taxes have bristled at program cuts to some of their pet programs in agriculture and land conservation.
Rep. Mario Civera (R., Delaware), the ranking Republican on the House Appropriations Committee, said taxes - even limited ones - were not on the table for GOP lawmakers.
"The caucus has no intention of looking at tax increases," said Civera. He said special legislative accounts and the governor's spending lines could be further reduced.
Civera said he intended to make a line-by-line budget and revenue presentation to his caucus in the coming weeks, so lawmakers would understand the reality of the fiscal crisis.
"We're talking about a $3 billion situation here," he said, referring to the state's current budget gap. "This is the worst I've seen it in 30 years in the legislature."
Rendell spokesman Chuck Ardo said the governor was willing to work with legislative leaders to reach an agreement but would not compromise the state's fiscal health just to get a budget completed by July 1.
Since Rendell took office in 2003, no budget has been passed on time.
"The governor remains committed to seeing the commonwealth move forward - and there is no end date for that commitment," Ardo said.
He added: "I think that providing odds on the timing of the budget may be a violation of the gaming law."
With economic forecasts dire, Pa. struggles to craft budget
By Amy Worden and Angela Couloumbis Posted on Mon, Apr. 27, 2009
Inquirer Harrisburg Bureau
HARRISBURG - With a new state revenue report likely to deliver more bad news this week and a budget deadline looming, legislative leaders are buckling down to craft a spending plan amid a dire economic climate.
If the first quarter is an indication, April revenue figures - usually among the year's strongest because of tax payments - will come in hundreds of millions of dollars below estimate.
So far this year, revenues have lagged nearly 8 percent below estimate, adding to the struggle Gov. Rendell and lawmakers are facing to close a widening shortfall in the state's current budget ahead of the June 30 deadline to enact the new one.
The current shortfall is $2.6 billion, up $300 million from just two months ago.
"I'd say Pennsylvania is pretty typical in the problems that it's encountering, but certainly a lot of states are much worse," said Corina Eckl, fiscal program director for the National Conference of State Legislatures.
The conference last week released a report that found states would have to address a cumulative $281 billion budget gap that would continue to 2011, and likely beyond.
While Pennsylvania's shortfall is still smaller than those of some states, including New Jersey at $3.3 billion, continued slumping revenues might force further cutbacks.
So far, Rendell has avoided drastic measures that other governors, such as California Gov. Arnold Schwarzenegger, have had to take: notably, ordering state employee furloughs and closing state offices.
The Rendell administration and the state's largest public-employee unions reached a tentative agreement earlier this month to avoid furloughs. Under a cost-cutting plan, the state would temporarily reduce its contribution to the fund that administers worker health-care benefits by 20 percent over the next 15 months, at a savings of $200 million.
Meanwhile, Senate and House leaders from both parties have been meeting to reach an agreement for next year's budget despite being split by ideological differences: Democrats say some tax increase will be necessary along with program cuts, while Republicans are adamant about deeper cuts and no additional taxes.
"We think under the Rendell proposal that we can balance the budget for the next four years," said Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Committee. "We're looking at a $10 billion problem in four years if nothing is done."
In his proposed $29 billion state budget unveiled in early February, Rendell said he wanted to increase spending for education and health care, while proposing limited taxes to cover shortfalls, such as an increase in the cigarette tax and new taxes on smokeless tobacco and gas drilling. He also proposed legalizing video poker as a way to help community college students cover tuition costs.
The governor has not proposed raising broad-based taxes such as income or sales, and wants to cut the rate of the capital stock and franchise tax that businesses pay.
Evans said the final budget would need to use a full menu of funding sources, including roughly $10 billion in federal stimulus dollars expected to flow into Pennsylvania over two years.
While recognizing cuts must be made in many areas, he said, he supports the governor's new investments in education and health care and will fight to preserve them.
"There will have to be compromise," Evans said. "Everything is on the table."
It will have to be to get the support of Republicans who control the Senate.
In an interview last week, Senate Majority Leader Dominic Pileggi (R., Delaware) said his caucus' problem with Rendell's proposed budget was basic but critical: His members do not agree with the spending level the governor is advocating.
Pileggi said his caucus wanted to make sure that the state wasn't unduly relying on the influx of federal stimulus dollars - which will last for only two years - to make ends meet. He said lawmakers needed to "look out at least to a three- or four-year horizon" and make sure that whatever state spending was approved could be sustained even when the federal money ran out.
"The stimulus money presents both a benefit in the short run, but also a trap in the long run if not used properly," Pileggi said. "We could be in a position where, if we think only in the short term, we are faced with the need for a drastic tax increase or the need for a drastic cut in services when the federal stimulus funding expires."
Right now, Pileggi said, "there is no support in our caucus for the spending levels established in the governor's budget proposal." He said his caucus was scouring the budget line by line to come up with "spending levels that are sustainable" and hoped to have that alternative complete in the next three weeks.
"Whether the governor and the [Democratic] leadership in the House are able to accept that product or agree to that remains to be seen," said Pileggi.
Other Republicans opposed to any new taxes have bristled at program cuts to some of their pet programs in agriculture and land conservation.
Rep. Mario Civera (R., Delaware), the ranking Republican on the House Appropriations Committee, said taxes - even limited ones - were not on the table for GOP lawmakers.
"The caucus has no intention of looking at tax increases," said Civera. He said special legislative accounts and the governor's spending lines could be further reduced.
Civera said he intended to make a line-by-line budget and revenue presentation to his caucus in the coming weeks, so lawmakers would understand the reality of the fiscal crisis.
"We're talking about a $3 billion situation here," he said, referring to the state's current budget gap. "This is the worst I've seen it in 30 years in the legislature."
Rendell spokesman Chuck Ardo said the governor was willing to work with legislative leaders to reach an agreement but would not compromise the state's fiscal health just to get a budget completed by July 1.
Since Rendell took office in 2003, no budget has been passed on time.
"The governor remains committed to seeing the commonwealth move forward - and there is no end date for that commitment," Ardo said.
He added: "I think that providing odds on the timing of the budget may be a violation of the gaming law."
Friday, April 24, 2009
We Saved A TON of Money
From the BCCT.
No tax increase for district
By: MANASEE WAGH
Bucks County Courier Times
The district saved $1 million by cutting down wasteful practices and installing a new air conditioning system.
The Morrisville school board has approved a zero tax increase and a proposed $18.9 million final budget for next year.
The news came as a relief to many residents at the Wednesday evening meeting. Taxes are expected to remain the same as this year, at $3,371 for an average assessed property of $18,000. Individual taxes may be lower if people take advantage of homestead rebates that the state offers from its gaming revenue. The millage rate is 187.3 mills and the value of a mill in Morrisville is $59,059.
The budget decreased by about $1 million from this year, due to several changes. Among them are a more efficient HVAC system in the high school next year and an effort to cut extraneous paper use and other wasteful practices.
As usual, salaries and benefits make up a large percentage of expenditures. Total staff salaries are expected to cost $9.22 million and total benefits should be $2.35 million.
"That's pretty consistent with where we were last year," said business administrator Paul DeAngelo.
Residents asked if the reduced budget means education will be affected.
"I can assure you all the cuts will not change any of the programs we have been doing," said Superintendent Elizabeth Yonson.
Some residents pointed to the disruption of M.R. Reiter Elementary School's operation as well as the loss of two elementary principals and a high school principal as a sign that education has been affected.
After Reiter Elementary closed several months ago due to a furnace explosion, the district ended up saving money in daily operational costs for the school. Students have been placed in other district buildings and eight modular units, which are paid for by insurance. There are no plans to replace three principals who left for various reasons, including a new job and retirement.
Although their jobs have been temporarily covered by other capable staff and administration, the board should think about replacing the principals, said board member Robin Reithmeyer.
In his 2009-10 budget calculations, DeAngelo assumed that Reiter would remain a non-operational district property. If the board decides this summer to sell it, the revenue could be used toward planned or future renovations for the district's middle/high school and other elementary school.
The budget appears balanced for now, but the future could bring uncontrollable expenditures to the district, said DeAngelo. One of the most damaging could be the anticipated sharp rise in future retirement pension contributions, up to 30 percent higher by 2013, according to the state. After next year, DeAngelo wants Morrisville to place $500,000 annually in a fund to avoid asking taxpayers to dig deep for retirement pensions.
The board plans to hear a public response to the proposed final budget on May 13 and adopt the budget on May 27. Details are available on the business page of Morrisville schools' Web site at www.mv.org/district.cfm?subpage=537779 and in district offices at 550 West Palmer St.
No tax increase for district
By: MANASEE WAGH
Bucks County Courier Times
The district saved $1 million by cutting down wasteful practices and installing a new air conditioning system.
The Morrisville school board has approved a zero tax increase and a proposed $18.9 million final budget for next year.
The news came as a relief to many residents at the Wednesday evening meeting. Taxes are expected to remain the same as this year, at $3,371 for an average assessed property of $18,000. Individual taxes may be lower if people take advantage of homestead rebates that the state offers from its gaming revenue. The millage rate is 187.3 mills and the value of a mill in Morrisville is $59,059.
The budget decreased by about $1 million from this year, due to several changes. Among them are a more efficient HVAC system in the high school next year and an effort to cut extraneous paper use and other wasteful practices.
As usual, salaries and benefits make up a large percentage of expenditures. Total staff salaries are expected to cost $9.22 million and total benefits should be $2.35 million.
"That's pretty consistent with where we were last year," said business administrator Paul DeAngelo.
Residents asked if the reduced budget means education will be affected.
"I can assure you all the cuts will not change any of the programs we have been doing," said Superintendent Elizabeth Yonson.
Some residents pointed to the disruption of M.R. Reiter Elementary School's operation as well as the loss of two elementary principals and a high school principal as a sign that education has been affected.
After Reiter Elementary closed several months ago due to a furnace explosion, the district ended up saving money in daily operational costs for the school. Students have been placed in other district buildings and eight modular units, which are paid for by insurance. There are no plans to replace three principals who left for various reasons, including a new job and retirement.
Although their jobs have been temporarily covered by other capable staff and administration, the board should think about replacing the principals, said board member Robin Reithmeyer.
In his 2009-10 budget calculations, DeAngelo assumed that Reiter would remain a non-operational district property. If the board decides this summer to sell it, the revenue could be used toward planned or future renovations for the district's middle/high school and other elementary school.
The budget appears balanced for now, but the future could bring uncontrollable expenditures to the district, said DeAngelo. One of the most damaging could be the anticipated sharp rise in future retirement pension contributions, up to 30 percent higher by 2013, according to the state. After next year, DeAngelo wants Morrisville to place $500,000 annually in a fund to avoid asking taxpayers to dig deep for retirement pensions.
The board plans to hear a public response to the proposed final budget on May 13 and adopt the budget on May 27. Details are available on the business page of Morrisville schools' Web site at www.mv.org/district.cfm?subpage=537779 and in district offices at 550 West Palmer St.
Thursday, April 23, 2009
Bristol Twp: No to Tech School Budget
From the BCCT.
School board rejects budget
By: JOAN HELLYER
Bucks County Courier Times
About one-third of students attending the technical training school come from Bristol Township.
The Bristol Township school board has rejected Bucks County Technical High School's proposed $22.4 million budget for 2009-10 to protest the added costs the district will be charged in the coming school year.
The township's share is scheduled to go up 15 percent over 2008-09 figures while overall costs at the comprehensive technical high school will increase 2.9 percent from the current year, officials said.
According to the tech school's funding formula, Bristol Township's added cost share is needed to cover increased enrollments from that district in recent years, officials said. Bristol Township sends about one third of the 1,500 students enrolled in the tech school, which also serves the Bensalem, Bristol, Morrisville, Neshaminy and Pennsbury school districts.
"I don't think there's a single member on this board that is at all against the tech school," Bristol Township school board President W. Earl Bruck said Monday night after board voted 0-8-1 to reject the 2009-10 proposed budget. Board members would like to see Bristol Township's increase closer to the 2.9 percent figure.
Bruck, who voted no, said he realizes that despite the vote, enough of the other governing bodies from the sending districts will approve and enact the budget.
To make that happen, at least four boards from the sending districts and at least 28 board members of the governing bodies have to approve the proposed budget.
As of today, the Bristol and Morrisville boards have approved the tech school financial plan and 17 members of those two governing bodies have voted in favor of it.
Pennsbury's board is set to vote on it tonight. The Neshaminy and Bensalem boards are scheduled next week to vote on the proposed tech school budget.
Bensalem and Bristol also will pay more next year while Morrisville, Neshaminy and Pennsbury will pay less than in 2008-09, according to the funding formula, tech school officials said.
Local school districts cover the bulk of the operating budget for the school on Wistar Road in Bristol Township. State and federal funds and other sources make up the difference in the $22.4 budget.
Sharing the costs
Below is the proposed payment schedule per sending school district to balance the budget for the Bucks County Technical High School in the 2009-10 school year.
Bensalem $3,135,268 ($2,998,665 for 2008-9)
Bristol $733,313 ($691,360)
Bristol Township $6,503,272 ($5,646,491
Morrisville $528,077 ($607,612)
Neshaminy $3,921,993 ($4,048,804)
Pennsbury $3,643,532 ($3,950,799)
School board rejects budget
By: JOAN HELLYER
Bucks County Courier Times
About one-third of students attending the technical training school come from Bristol Township.
The Bristol Township school board has rejected Bucks County Technical High School's proposed $22.4 million budget for 2009-10 to protest the added costs the district will be charged in the coming school year.
The township's share is scheduled to go up 15 percent over 2008-09 figures while overall costs at the comprehensive technical high school will increase 2.9 percent from the current year, officials said.
According to the tech school's funding formula, Bristol Township's added cost share is needed to cover increased enrollments from that district in recent years, officials said. Bristol Township sends about one third of the 1,500 students enrolled in the tech school, which also serves the Bensalem, Bristol, Morrisville, Neshaminy and Pennsbury school districts.
"I don't think there's a single member on this board that is at all against the tech school," Bristol Township school board President W. Earl Bruck said Monday night after board voted 0-8-1 to reject the 2009-10 proposed budget. Board members would like to see Bristol Township's increase closer to the 2.9 percent figure.
Bruck, who voted no, said he realizes that despite the vote, enough of the other governing bodies from the sending districts will approve and enact the budget.
To make that happen, at least four boards from the sending districts and at least 28 board members of the governing bodies have to approve the proposed budget.
As of today, the Bristol and Morrisville boards have approved the tech school financial plan and 17 members of those two governing bodies have voted in favor of it.
Pennsbury's board is set to vote on it tonight. The Neshaminy and Bensalem boards are scheduled next week to vote on the proposed tech school budget.
Bensalem and Bristol also will pay more next year while Morrisville, Neshaminy and Pennsbury will pay less than in 2008-09, according to the funding formula, tech school officials said.
Local school districts cover the bulk of the operating budget for the school on Wistar Road in Bristol Township. State and federal funds and other sources make up the difference in the $22.4 budget.
Sharing the costs
Below is the proposed payment schedule per sending school district to balance the budget for the Bucks County Technical High School in the 2009-10 school year.
Bensalem $3,135,268 ($2,998,665 for 2008-9)
Bristol $733,313 ($691,360)
Bristol Township $6,503,272 ($5,646,491
Morrisville $528,077 ($607,612)
Neshaminy $3,921,993 ($4,048,804)
Pennsbury $3,643,532 ($3,950,799)
Wednesday, April 22, 2009
Budget Q (Minus the A)
Here's a series of budget questions posed by one of our indefatigable commenters.
Will answers ever be found? Perhaps we'll know tonight at 7:30 when the monthly business meeting of the Court of Emperor William I is held.
Jon has left a new comment on your post "George Mount Retiring":
This belongs further down, but below are some Budget Thoughts & Questions, based on looking at the 4/8/09 Powerpoint presentation in the 2009-2010 Budget Links.
Revenues
1. Overall, budgeted revenues are up $124k over last year ($18,895k vs. $18,771k).
2. Where’s the extra revenue coming from? The Federal government.
3. Local revenues are down $211k ($11,962k vs. $12,173k).
4. State revenues are essentially flat (+2k, $5,553k vs. $5,551k).
5. Federal revenues are up $332k ($1,231k vs. $899k).
6. Why are Local revenues down $211k?
Even thought the millage rate stays the same as last year (187.3 mils), this budget assumes a $102k reduction in Real Estate Tax revenues ($10,617k vs. $10,719k). That and a $147.5k (50%) drop in Investment Earnings ($147.5k vs. $295k) overwhelm a $67k increase ($102k vs. 35k) in “Rentals”.
Question: How is this near-tripling of Rental revenue going to be achieved?
7. Why are State revenues flat (+2k)?
A $338k increase in basic education funding ($3,265k vs. $2,926k) is virtually wiped out by the loss of a $102k EAP Grant for Tutoring, and a $201k drop in Extra Grant funding ($530k vs. $329k).
Question: Why did we lose this $303k in grant funding? Hopefully it wasn’t from prior cuts in grant writing resources.
8. Why are Federal revenues up (+$331k)?
Mostly from a $297k increase in 21st Century Grant funding ($919k vs. $622k).
Question: Isn’t this grant funding targeted to certain programs, and not for basic education, so it doesn't necessarily replace lost Local & State revenue?
9. Conclusions: Overall revenues are up, but mostly from higher Federal 21st Century Grant funding. But this grant funding is likely "earmarked" for certain programs, so it doesn't necessarily replace lost Local & State revenue. That means overall basic education revenues look down.
Expenses
1. Overall, expenses are down $988k ($18,895k vs. 19,883k).
2. Where are the expenses dropping?
The 6 areas with changes > $50k are:
a. 1200 (Special Programs) is down $429k ($3,454k vs. $3,883k). Salaries are up $223k ($1,211k vs. $988k), but “Purchased Professional & Technical Services” dropped a whopping $694k ($1,205k vs. $1,899k).
Questions: What makes up these Purchased Professional & Technical Services? Why such a drastic drop?Is something being deferred until next year? Why? Was something pricey bought last year that isn't being bought this year?
b. 1300 (Vocational Education) is down $81k ($758k vs. $839k), mostly from an $89k drop in “Other Purchased Services ($537k vs. $626k).
Question: Is this from Morrisville’s reduced Tech School share under the funding formula this year?
c. 2100 (Support Services) is down $119k. Salaries are up $56k ($419k vs. $363k), but “Purchased Professional & Technical Services” dropped $176.5k (from $182k to $5.5k, a 97% drop).
Questions: Again, what makes up these Purchased Professional & Technical Services? Why such a drastic drop? Is something being deferred until next year? Why? Was something pricey bought last year that isn't being bought this year?
d. 2300 (Administration) is down $208k, mostly from a $164k drop in Salaries ($495k vs. $659k), and a $21k drop in Benefits ($148k vs. $169k).
Question: Is this from the loss of Kate Taylor and Karen Huggins, and not replacing Asst. Principals? If so, I just hope this 3.5 mil savings is worth it in the long run.
e. 2600 (Maintenance) is down $112k ($1,622k vs. $1,734k, mostly from reduced Purchased Property Services (-$53k) and reduced Supplies (-$59k).
Question: Is this from not having to maintain MR Reiter as much? If so, it isn’t that big of a drop in overall maintenance spending (< 1.9 mils, < 6.5% drop in Maint. budget, but 1 out of 3 buildings is 33.3%, and MR Reiter’s 47,397 ft2 is 20% of the combined 237,689 ft2 of all 3 buildings). At < 1.9 mils, it’s certainly not the FORTUNE Bill Hellmann said we’d save.
f. 5100 (Debt Service) is up $67k ($997k vs. $930k).
Questions: Does this year's installment on paying off the $2.5 million in Bond Defeasement Expenses Hellmann didn't tell anybody about factor into this? Otherwise, why is Debt Sevice up when most of the bond money was defeased – didn’t that drastically reduce the debt?
3. Conclusions: reduced Administration and Maintenance cut expenses by $320k, about 1/3rd of the total $988k drop in expenses. Special Programs, Vocational Education, and Support Services dropped a combined $629k. Salaries are generally still rising, so a concern is that the cuts are coming from items that effect educational delivery.
Other Misc. Comments
1. p.6 --> some of the bar graph heights look wrong, based on other data in the presentation. For example, the 2008-09 Local Revenue is $12.17 million, but the bar height is over $14 million. State Revenues for 2008-09 ($5.551 million) and 2009-10 ($5.553 million) are virtually the same, but the bar is significantly higher for 2009-10.
2. p. 14 - Note that starting in 2005-06, everybody's property tax assessment was increased by a factor of 4, and the corresponding tax millage rate was reduced by a factor of 4. So if you really want to compare apples-to-apples on millage rates, you need to divide the years prior to 2005-06 by 4 - or multiply 2005-06 on by 4. Otherwise, some might be tempted to think that Sandy Gibson is really a hero because she presided over an astonishingly drastic cut in school taxes.
3. p. 38 - Looks like last year’s budget was helped by depleting the Fund Balance by $1.112 million (from $2.793 million to $1.681 million). Assuming 1 tax mil is about $60k, without this depletion of the Fund Balance, it looks like there would have been a 19 mil (~10%) tax increase last year.
So last year, the 2 main things the board did to balance the budget/hold the line on taxes were:
a. Get a ~$1+ million one-shot-deal from defeasing most of the bond money (at a long-term cost of $2.5 million);
b. Dip into the piggy bank to the tune of $1.112 million - money that was left to them by those evil "prior boards".
The budget projections from 2010-13 show the Fund Balance being further depleted by $1.456 million by 2013, all the way down to a mere $225k.
4. p. 38 - these budget figures show a Real Estate Tax collection rate of 93.5% throughout, but the earlier slides all seem based on a 94% collection rate (see p. 5). Why the difference? Which figure is right/more accurate?
Will answers ever be found? Perhaps we'll know tonight at 7:30 when the monthly business meeting of the Court of Emperor William I is held.
Jon has left a new comment on your post "George Mount Retiring":
This belongs further down, but below are some Budget Thoughts & Questions, based on looking at the 4/8/09 Powerpoint presentation in the 2009-2010 Budget Links.
Revenues
1. Overall, budgeted revenues are up $124k over last year ($18,895k vs. $18,771k).
2. Where’s the extra revenue coming from? The Federal government.
3. Local revenues are down $211k ($11,962k vs. $12,173k).
4. State revenues are essentially flat (+2k, $5,553k vs. $5,551k).
5. Federal revenues are up $332k ($1,231k vs. $899k).
6. Why are Local revenues down $211k?
Even thought the millage rate stays the same as last year (187.3 mils), this budget assumes a $102k reduction in Real Estate Tax revenues ($10,617k vs. $10,719k). That and a $147.5k (50%) drop in Investment Earnings ($147.5k vs. $295k) overwhelm a $67k increase ($102k vs. 35k) in “Rentals”.
Question: How is this near-tripling of Rental revenue going to be achieved?
7. Why are State revenues flat (+2k)?
A $338k increase in basic education funding ($3,265k vs. $2,926k) is virtually wiped out by the loss of a $102k EAP Grant for Tutoring, and a $201k drop in Extra Grant funding ($530k vs. $329k).
Question: Why did we lose this $303k in grant funding? Hopefully it wasn’t from prior cuts in grant writing resources.
8. Why are Federal revenues up (+$331k)?
Mostly from a $297k increase in 21st Century Grant funding ($919k vs. $622k).
Question: Isn’t this grant funding targeted to certain programs, and not for basic education, so it doesn't necessarily replace lost Local & State revenue?
9. Conclusions: Overall revenues are up, but mostly from higher Federal 21st Century Grant funding. But this grant funding is likely "earmarked" for certain programs, so it doesn't necessarily replace lost Local & State revenue. That means overall basic education revenues look down.
Expenses
1. Overall, expenses are down $988k ($18,895k vs. 19,883k).
2. Where are the expenses dropping?
The 6 areas with changes > $50k are:
a. 1200 (Special Programs) is down $429k ($3,454k vs. $3,883k). Salaries are up $223k ($1,211k vs. $988k), but “Purchased Professional & Technical Services” dropped a whopping $694k ($1,205k vs. $1,899k).
Questions: What makes up these Purchased Professional & Technical Services? Why such a drastic drop?Is something being deferred until next year? Why? Was something pricey bought last year that isn't being bought this year?
b. 1300 (Vocational Education) is down $81k ($758k vs. $839k), mostly from an $89k drop in “Other Purchased Services ($537k vs. $626k).
Question: Is this from Morrisville’s reduced Tech School share under the funding formula this year?
c. 2100 (Support Services) is down $119k. Salaries are up $56k ($419k vs. $363k), but “Purchased Professional & Technical Services” dropped $176.5k (from $182k to $5.5k, a 97% drop).
Questions: Again, what makes up these Purchased Professional & Technical Services? Why such a drastic drop? Is something being deferred until next year? Why? Was something pricey bought last year that isn't being bought this year?
d. 2300 (Administration) is down $208k, mostly from a $164k drop in Salaries ($495k vs. $659k), and a $21k drop in Benefits ($148k vs. $169k).
Question: Is this from the loss of Kate Taylor and Karen Huggins, and not replacing Asst. Principals? If so, I just hope this 3.5 mil savings is worth it in the long run.
e. 2600 (Maintenance) is down $112k ($1,622k vs. $1,734k, mostly from reduced Purchased Property Services (-$53k) and reduced Supplies (-$59k).
Question: Is this from not having to maintain MR Reiter as much? If so, it isn’t that big of a drop in overall maintenance spending (< 1.9 mils, < 6.5% drop in Maint. budget, but 1 out of 3 buildings is 33.3%, and MR Reiter’s 47,397 ft2 is 20% of the combined 237,689 ft2 of all 3 buildings). At < 1.9 mils, it’s certainly not the FORTUNE Bill Hellmann said we’d save.
f. 5100 (Debt Service) is up $67k ($997k vs. $930k).
Questions: Does this year's installment on paying off the $2.5 million in Bond Defeasement Expenses Hellmann didn't tell anybody about factor into this? Otherwise, why is Debt Sevice up when most of the bond money was defeased – didn’t that drastically reduce the debt?
3. Conclusions: reduced Administration and Maintenance cut expenses by $320k, about 1/3rd of the total $988k drop in expenses. Special Programs, Vocational Education, and Support Services dropped a combined $629k. Salaries are generally still rising, so a concern is that the cuts are coming from items that effect educational delivery.
Other Misc. Comments
1. p.6 --> some of the bar graph heights look wrong, based on other data in the presentation. For example, the 2008-09 Local Revenue is $12.17 million, but the bar height is over $14 million. State Revenues for 2008-09 ($5.551 million) and 2009-10 ($5.553 million) are virtually the same, but the bar is significantly higher for 2009-10.
2. p. 14 - Note that starting in 2005-06, everybody's property tax assessment was increased by a factor of 4, and the corresponding tax millage rate was reduced by a factor of 4. So if you really want to compare apples-to-apples on millage rates, you need to divide the years prior to 2005-06 by 4 - or multiply 2005-06 on by 4. Otherwise, some might be tempted to think that Sandy Gibson is really a hero because she presided over an astonishingly drastic cut in school taxes.
3. p. 38 - Looks like last year’s budget was helped by depleting the Fund Balance by $1.112 million (from $2.793 million to $1.681 million). Assuming 1 tax mil is about $60k, without this depletion of the Fund Balance, it looks like there would have been a 19 mil (~10%) tax increase last year.
So last year, the 2 main things the board did to balance the budget/hold the line on taxes were:
a. Get a ~$1+ million one-shot-deal from defeasing most of the bond money (at a long-term cost of $2.5 million);
b. Dip into the piggy bank to the tune of $1.112 million - money that was left to them by those evil "prior boards".
The budget projections from 2010-13 show the Fund Balance being further depleted by $1.456 million by 2013, all the way down to a mere $225k.
4. p. 38 - these budget figures show a Real Estate Tax collection rate of 93.5% throughout, but the earlier slides all seem based on a 94% collection rate (see p. 5). Why the difference? Which figure is right/more accurate?
Monday, April 13, 2009
2009-2010 Budget Links
Here's links to the budget documents
# 09-10 Budget Calendar
# Preliminary 2009-10 Budget Presentation 3/11/09
# Proposed Preliminary 2009-10 Budget as of 4-3-09
# Preliminary Proposed 2009-10 Budget Power Point
MORRISVILLE BOROUGH SCHOOL DISTRICT
In accordance with the School Budget Calendar of the School District of Borough of Morrisville, the proposed Preliminary Budget for the 2009-2010 school year will be presented at the Finance Committee Meeting on Wednesday, April 8, 2009 at 7:00 p.m. in Conference Room G-9 located in the Middle/Senior High School, 550 West Palmer Street, Morrisville, PA.
The Board of School Directors may adopt the proposed Preliminary Budget at their monthly Board Meeting on April 22, 2009, at 7:30 p.m., in the LGI Meeting Room located in the Middle/Senior High School. The proposed Preliminary Budget is available on the website at www.mv.org and at the Business Office located in the High School.
Marlys Mihok
Board Secretary
Appeared in: Bucks County Courier Times on Sunday, 04/05/2009
# 09-10 Budget Calendar
# Preliminary 2009-10 Budget Presentation 3/11/09
# Proposed Preliminary 2009-10 Budget as of 4-3-09
# Preliminary Proposed 2009-10 Budget Power Point
MORRISVILLE BOROUGH SCHOOL DISTRICT
In accordance with the School Budget Calendar of the School District of Borough of Morrisville, the proposed Preliminary Budget for the 2009-2010 school year will be presented at the Finance Committee Meeting on Wednesday, April 8, 2009 at 7:00 p.m. in Conference Room G-9 located in the Middle/Senior High School, 550 West Palmer Street, Morrisville, PA.
The Board of School Directors may adopt the proposed Preliminary Budget at their monthly Board Meeting on April 22, 2009, at 7:30 p.m., in the LGI Meeting Room located in the Middle/Senior High School. The proposed Preliminary Budget is available on the website at www.mv.org and at the Business Office located in the High School.
Marlys Mihok
Board Secretary
Appeared in: Bucks County Courier Times on Sunday, 04/05/2009
Monday, February 23, 2009
The Devil is in the Details
From the BCCT. Morrisville can use $441,000. No one disputes that. The question is *how* or *where* to spend the money.
SCHOOL STIMULUS MONEY
Devil of package is in details
School districts won’t know the regulations for spending the money until June.
By HILARY BENTMAN and JOAN HELLYER
Area school districts will get a slice of the president’s $787 billion stimulus package, but just how much, under what conditions, and for how long remains unclear.
It has left local school administrators scratching their heads and waiting for answers to questions that mount daily.
“It’s complicated,” said Eileen Kelliher, spokeswoman for the Bristol Township School District, which is scheduled to receive almost $3 million over two years to educate low income and special education students.
“In June, we will get the administrative regulations that tell us what we can use it for and then we will be able to plan,” Kelliher said.
The devil, they say, is in the details, agreed Dave Matyas, business administrator for the Central Bucks School District. “We don’t know the details and you never know for sure what strings come attached,” he said.
Under new estimates recently released, Central Bucks could see $3.4 million from the federal bill to be used over a two-year period.
The stimulus package is providing school districts with Title I and IDEA money.
Title I helps districts that have high concentrations of students from low-income families. Most area schools use their allotment for remediation. But only eight area districts are eligible for the additional money under the stimulus package.
IDEA, or Individuals with Disabilities Education Act, funding is often used for special education, an area of school budgets that continues to increase. The money is given to the state and redistributed to the districts.
Both Title I and IDEA grants can be used to fund existing programs, said Melissa Salmanowitz, spokeswoman for the House Education and Labor Committee, which released the estimates.
“They can use the money however they see fit, as long as it’s in accordance with the law,” she said.
But just how much of an impact the money will have on local districts is hazy.
Pennsbury, which could receive almost $2.5 million for special education expenses, isn’t making any plans for the money until district officials find out from the state how the money can be spent, spokeswoman Ann Langtry said.
Bob Reichert, business manager in Hatboro-Horsham, expects his district won’t see much in the way of increased state revenue this year, so new federal funding may only “help sustain what we received in the past.”
“A lot of it is going to be onetime funds, a shot in the arm,” he added. Hatboro-Horsham is estimated to receive about $1.1 million over two years.
Additionally, estimates show Pennsylvania will get about $1.9 billion in fiscal stabilization money, which can be used for school construction, renovations and to help districts make ends meet.
Those funds will be distributed by the state Department of Education, where officials are working on the parameters for allocation, said spokesman Michael Race.
The education department told the state’s 501 school districts last month to compile wish-lists of shovel-ready projects in preparation for the stimulus package. Shovel-ready projects are those that can begin in six months and immediately put people to work.
Bensalem is putting together its wish list, Superintendent James Lombardo told school board members last week, with hopes that some of the money could be used to cover renovations in the coming school year.
Palisades School District officials already compiled their list. It includes new roofs for a couple of schools and relocating the varsity baseball and softball fields.
How quickly some of those projects can be funded and whether the stimulus will help reduce the property tax burden in the coming school year is unclear as the state waits for the money to roll in.
SCHOOL STIMULUS MONEY
Devil of package is in details
School districts won’t know the regulations for spending the money until June.
By HILARY BENTMAN and JOAN HELLYER
Area school districts will get a slice of the president’s $787 billion stimulus package, but just how much, under what conditions, and for how long remains unclear.
It has left local school administrators scratching their heads and waiting for answers to questions that mount daily.
“It’s complicated,” said Eileen Kelliher, spokeswoman for the Bristol Township School District, which is scheduled to receive almost $3 million over two years to educate low income and special education students.
“In June, we will get the administrative regulations that tell us what we can use it for and then we will be able to plan,” Kelliher said.
The devil, they say, is in the details, agreed Dave Matyas, business administrator for the Central Bucks School District. “We don’t know the details and you never know for sure what strings come attached,” he said.
Under new estimates recently released, Central Bucks could see $3.4 million from the federal bill to be used over a two-year period.The stimulus package is providing school districts with Title I and IDEA money.
Title I helps districts that have high concentrations of students from low-income families. Most area schools use their allotment for remediation. But only eight area districts are eligible for the additional money under the stimulus package.
IDEA, or Individuals with Disabilities Education Act, funding is often used for special education, an area of school budgets that continues to increase. The money is given to the state and redistributed to the districts.
Both Title I and IDEA grants can be used to fund existing programs, said Melissa Salmanowitz, spokeswoman for the House Education and Labor Committee, which released the estimates.
“They can use the money however they see fit, as long as it’s in accordance with the law,” she said.
But just how much of an impact the money will have on local districts is hazy.
Pennsbury, which could receive almost $2.5 million for special education expenses, isn’t making any plans for the money until district officials find out from the state how the money can be spent, spokeswoman Ann Langtry said.
Bob Reichert, business manager in Hatboro-Horsham, expects his district won’t see much in the way of increased state revenue this year, so new federal funding may only “help sustain what we received in the past.”
“A lot of it is going to be onetime funds, a shot in the arm,” he added. Hatboro-Horsham is estimated to receive about $1.1 million over two years.
Additionally, estimates show Pennsylvania will get about $1.9 billion in fiscal stabilization money, which can be used for school construction, renovations and to help districts make ends meet.
Those funds will be distributed by the state Department of Education, where officials are working on the parameters for allocation, said spokesman Michael Race.
The education department told the state’s 501 school districts last month to compile wish-lists of shovel-ready projects in preparation for the stimulus package. Shovel-ready projects are those that can begin in six months and immediately put people to work.
Bensalem is putting together its wish list, Superintendent James Lombardo told school board members last week, with hopes that some of the money could be used to cover renovations in the coming school year.
Palisades School District officials already compiled their list. It includes new roofs for a couple of schools and relocating the varsity baseball and softball fields.
How quickly some of those projects can be funded and whether the stimulus will help reduce the property tax burden in the coming school year is unclear as the state waits for the money to roll in.
Wednesday, February 18, 2009
Dear PA Taxpayer: Pay Up
From the Wilkes-Barre Times-Leader.
Pa. pension funds tell lawmakers of major losses
By MARK SCOLFORO
Pennsylvania's two major public-sector pension plans on Tuesday gave state lawmakers the bracing news that together their investments lost more than $28 billion in value last year.
Officials who oversee the separate funds for state workers and public school employees also warned that a sharp increase in taxpayer subsidies looms because stock market losses will make a long-anticipated 2012 rate spike much steeper than recently projected.
The two funds' percentage losses on investments were similar. The value of State Employees' Retirement System investments dropped 28.6 percent in 2008, while Public School Employees' Retirement System investments fell 29.7 percent.
State Employees' Retirement System chairman Nicholas J. Maiale said such increases would represent a severe budgetary challenge for the state.
The State Employees' Retirement System, which benefits mostly state workers, valued its investments at $24 billion as of Dec. 31, a drop of $11.5 billion for the year. Maiale said investments did better than the overall market in January but still lost about 3 percent.
The school retirement system, which benefits teachers and other school employees, reported a six-month loss in value of $17.3 billion to $45.4 billion from the beginning of the state's fiscal year on July 1 to Dec. 31. A dollar total for the year was not immediately available.
The state employees' pension fund said the losses mean employer contributions could approach 29 percent of payroll by 2012, far higher than had been expected after its investments had generated impressive returns in recent years. For most people enrolled in the State Employees' Retirement System, the government is their employer. The system's current employer contribution rate is 4 percent of payroll.
The teachers' pension fund said it projects its spike could exceed 28 percent for the 2012-13 year. If that occurs, the pain will be felt acutely by people who pay property taxes to fund school districts. The current rate is 4.76 percent.
"Ultimately we've got to hope that the market does grow" in the coming years, said Appropriations Chairman Dwight Evans, D-Philadelphia.
No additional pension payments that might serve to reduce the spike are included in the 2009-10 state budget outlined by Gov. Ed Rendell two weeks ago.
Although they are often referred to as spikes, the higher rates in 2012 will more closely resemble the start of a higher plateau. They are expected to usher in a lengthy period of much higher payments by taxpayers.
The spike has its origins in a 2001 law that increased pension benefits for most legislators by 50 percent, with 25 percent increases given to state workers and school employees.
Retirees, who did not benefit from that change, then clamored for a cost-of-living increase, which the Legislature passed the next year. In 2003, with a big increase in mandatory pension payments about to hit, the Legislature and Rendell struck a deal to delay most of the pain for a decade.
The day of reckoning is now only a few years away.
The pension fund executives were among the experts appearing at an all-day meeting of the House Appropriations Committee as it began consideration of Rendell's proposed budget.
Ron Snell with the National Conference of State Legislatures told the committee that states do not typically rebound immediately after an economic tide turns.
"Even if the economy hits bottom toward the end of this year, we would expect state fiscal recovery to lag that," Snell said.
Another witness, Acting Revenue Secretary Stephen Stetler, said Rendell's proposed natural-gas extraction tax is projected to bring in $632 million a year by 2013-14. Another new tax the governor wants, on video poker, would eventually produce $550 million annually, he said.
State Treasurer Rob McCord, who was sworn in last month, said his department has "chronic, hazardous and time-sensitive" shortcomings in its technology systems. He said the department's aging mainframe computer broke down over Thanksgiving and required a $10,000-a-day patch through a Houston company.
Pa. pension funds tell lawmakers of major losses
By MARK SCOLFORO
Pennsylvania's two major public-sector pension plans on Tuesday gave state lawmakers the bracing news that together their investments lost more than $28 billion in value last year.
Officials who oversee the separate funds for state workers and public school employees also warned that a sharp increase in taxpayer subsidies looms because stock market losses will make a long-anticipated 2012 rate spike much steeper than recently projected.
The two funds' percentage losses on investments were similar. The value of State Employees' Retirement System investments dropped 28.6 percent in 2008, while Public School Employees' Retirement System investments fell 29.7 percent.
State Employees' Retirement System chairman Nicholas J. Maiale said such increases would represent a severe budgetary challenge for the state.
The State Employees' Retirement System, which benefits mostly state workers, valued its investments at $24 billion as of Dec. 31, a drop of $11.5 billion for the year. Maiale said investments did better than the overall market in January but still lost about 3 percent.
The school retirement system, which benefits teachers and other school employees, reported a six-month loss in value of $17.3 billion to $45.4 billion from the beginning of the state's fiscal year on July 1 to Dec. 31. A dollar total for the year was not immediately available.
The state employees' pension fund said the losses mean employer contributions could approach 29 percent of payroll by 2012, far higher than had been expected after its investments had generated impressive returns in recent years. For most people enrolled in the State Employees' Retirement System, the government is their employer. The system's current employer contribution rate is 4 percent of payroll.
The teachers' pension fund said it projects its spike could exceed 28 percent for the 2012-13 year. If that occurs, the pain will be felt acutely by people who pay property taxes to fund school districts. The current rate is 4.76 percent.
"Ultimately we've got to hope that the market does grow" in the coming years, said Appropriations Chairman Dwight Evans, D-Philadelphia.
No additional pension payments that might serve to reduce the spike are included in the 2009-10 state budget outlined by Gov. Ed Rendell two weeks ago.
Although they are often referred to as spikes, the higher rates in 2012 will more closely resemble the start of a higher plateau. They are expected to usher in a lengthy period of much higher payments by taxpayers.
The spike has its origins in a 2001 law that increased pension benefits for most legislators by 50 percent, with 25 percent increases given to state workers and school employees.
Retirees, who did not benefit from that change, then clamored for a cost-of-living increase, which the Legislature passed the next year. In 2003, with a big increase in mandatory pension payments about to hit, the Legislature and Rendell struck a deal to delay most of the pain for a decade.
The day of reckoning is now only a few years away.
The pension fund executives were among the experts appearing at an all-day meeting of the House Appropriations Committee as it began consideration of Rendell's proposed budget.
Ron Snell with the National Conference of State Legislatures told the committee that states do not typically rebound immediately after an economic tide turns.
"Even if the economy hits bottom toward the end of this year, we would expect state fiscal recovery to lag that," Snell said.
Another witness, Acting Revenue Secretary Stephen Stetler, said Rendell's proposed natural-gas extraction tax is projected to bring in $632 million a year by 2013-14. Another new tax the governor wants, on video poker, would eventually produce $550 million annually, he said.
State Treasurer Rob McCord, who was sworn in last month, said his department has "chronic, hazardous and time-sensitive" shortcomings in its technology systems. He said the department's aging mainframe computer broke down over Thanksgiving and required a $10,000-a-day patch through a Houston company.
Monday, February 2, 2009
Pennsylvania Budget Pains
From the BCCT.
Pa. shortfall promises big test for gov, lawmakers
The Associated Press
As the nation's economy was plodding to a halt and layoffs were accelerating last summer, Pennsylvania state government's budget shortfall was already growing.
It started in May, when the state recorded its first of what is now nine consecutive monthly shortfalls, and is now so large that it begs comparison to the handful of budget crises that rank as the worst of the past 40 years.
And it promises to entangle Gov. Ed Rendell and state legislators in a protracted battle that is certain to stretch into the summer and possibly into the campaigns for the 2010 elections.
While the Democratic governor and legislative leaders of both parties are pledging to work together in a bipartisan way and erase the shortfall without a major tax increase, some observers question whether they grasp the full extent of the problem or the difficult steps that will have to be taken.
"This was created by an economic storm that is sweeping across the state and nation," said Michael L. Young, who studies Pennsylvania state government and runs a Harrisburg-based opinion research firm. "This one is big time. This one is the real thing."
The budget gap has rocketed to Topic No. 1 on an agenda already choked with unresolved issues: crumbling highways and bridges, a growing number of uninsured and skyrocketing electric bills.
Sensitive decisions over who will pay more and who will get less are likely to expose political fissures, as well as divisions between a second-term governor who leaves office in less than two years and legislators with their own political futures to consider.
Rendell and legislators didn't help themselves last summer when they approved a $28.3 billion budget that increased spending by 4 percent and relied on more than $550 million from one-time sources to prop up spending _ even as some lawmakers and senior staff quietly predicted a shortfall of a billion dollars or more.
Rendell now projects that revenues will lag $2.3 billion _ or nearly 8 percent _ behind expectations when this fiscal year ends on June 30. Maintaining the same services and subsidies in the 2009-10 fiscal year would create an even bigger shortfall after inflation is figured in, Rendell and legislators predict.
So far, Rendell has sought to freeze $500 million in spending and has threatened to lay off state employees unless he gets money-saving concessions from labor unions.
On Wednesday, when he presents his 2009-10 budget to a joint session of the state Senate and House of Representatives, Rendell is expected to lay out his vision for how state operations should make the painful adjustment to the national recession.
The governor is expected to proposed shrinking or eliminating programs. He will scour state accounts for reserves. And he is looking to tax previously untaxed activities, such as sales of chewing tobacco and cigars and the production of natural gas.
All of this has legislators and others recalling the shortfalls of 1991, 1977 and 1971, when budgets were passed with massive tax increases only after events such as long stalemates, high-stakes court challenges, melees on the House floor and state employees going unpaid or getting laid off.
"I think clearly it's going to be one of the biggest challenges we've faced in Harrisburg in a number of years," said Allegheny County Sen. Jay Costa, the ranking Democrat on the Appropriations Committee.
The 1991 budget battle is stuck in the memories of many in the Capitol.
In December 1990, then-Gov. Robert P. Casey's budget director, Michael Hershock, announced that the state was staring at a $1 billion shortfall. However, he dismissed the need for a major tax increase.
Less than two months later, Casey proposed $1.7 billion in tax increases. In August 1991, Casey signed a budget with $3.3 billion in new taxes.
Barbara Hafer, who was the state's auditor general and the unsuccessful Republican challenger to Casey's re-election in 1990, said the solution was as bad as the problem.
Legislators, she said, held the budget hostage by demanding money for their pet projects before they would vote for a tax package that they viewed as a political risk.
This time around, legislative leaders must exercise fiscal discipline, said Hafer, who later was elected as state treasurer.
"What is it going to take to pass that budget? That's the question you have to ask," Hafer said last week. "Legislators say, 'I need something to run on. I need (money for) my bridge, my street, my school district, my Little League, my baseball field, my fire department' and that becomes expensive."
In 1971, legislators finally closed a massive shortfall by passing the state's first income tax after a budget impasse that lasted more than a year.
Young warned of a repeat. Legislators may pull out all the stops this year to avoid a broad-based tax increase _ only to find that a still-worsening economy leaves them with no choice in 2010, just months before voters elect a new governor and nine out of 10 legislators, Young said.
"The prospect of a major tax increase in a major gubernatorial year is almost beyond imaginable," Young said. "This is a doomsday scenario that we may see."
If they wonder whether to vote for a major tax increase, legislators can consider this: Research by Young and Franklin & Marshall College pollster G. Terry Madonna found that voters are unlikely to take revenge on legislators because they supported a tax increase.
Re-election rates reached above 95 percent in the elections following tax increases in 1983 and 1991 _ leading Madonna and Young to call it the "great tax vote myth."
Pa. shortfall promises big test for gov, lawmakers
The Associated Press
As the nation's economy was plodding to a halt and layoffs were accelerating last summer, Pennsylvania state government's budget shortfall was already growing.
It started in May, when the state recorded its first of what is now nine consecutive monthly shortfalls, and is now so large that it begs comparison to the handful of budget crises that rank as the worst of the past 40 years.
And it promises to entangle Gov. Ed Rendell and state legislators in a protracted battle that is certain to stretch into the summer and possibly into the campaigns for the 2010 elections.
While the Democratic governor and legislative leaders of both parties are pledging to work together in a bipartisan way and erase the shortfall without a major tax increase, some observers question whether they grasp the full extent of the problem or the difficult steps that will have to be taken.
"This was created by an economic storm that is sweeping across the state and nation," said Michael L. Young, who studies Pennsylvania state government and runs a Harrisburg-based opinion research firm. "This one is big time. This one is the real thing."
The budget gap has rocketed to Topic No. 1 on an agenda already choked with unresolved issues: crumbling highways and bridges, a growing number of uninsured and skyrocketing electric bills.
Sensitive decisions over who will pay more and who will get less are likely to expose political fissures, as well as divisions between a second-term governor who leaves office in less than two years and legislators with their own political futures to consider.
Rendell and legislators didn't help themselves last summer when they approved a $28.3 billion budget that increased spending by 4 percent and relied on more than $550 million from one-time sources to prop up spending _ even as some lawmakers and senior staff quietly predicted a shortfall of a billion dollars or more.
Rendell now projects that revenues will lag $2.3 billion _ or nearly 8 percent _ behind expectations when this fiscal year ends on June 30. Maintaining the same services and subsidies in the 2009-10 fiscal year would create an even bigger shortfall after inflation is figured in, Rendell and legislators predict.
So far, Rendell has sought to freeze $500 million in spending and has threatened to lay off state employees unless he gets money-saving concessions from labor unions.
On Wednesday, when he presents his 2009-10 budget to a joint session of the state Senate and House of Representatives, Rendell is expected to lay out his vision for how state operations should make the painful adjustment to the national recession.
The governor is expected to proposed shrinking or eliminating programs. He will scour state accounts for reserves. And he is looking to tax previously untaxed activities, such as sales of chewing tobacco and cigars and the production of natural gas.
All of this has legislators and others recalling the shortfalls of 1991, 1977 and 1971, when budgets were passed with massive tax increases only after events such as long stalemates, high-stakes court challenges, melees on the House floor and state employees going unpaid or getting laid off.
"I think clearly it's going to be one of the biggest challenges we've faced in Harrisburg in a number of years," said Allegheny County Sen. Jay Costa, the ranking Democrat on the Appropriations Committee.
The 1991 budget battle is stuck in the memories of many in the Capitol.
In December 1990, then-Gov. Robert P. Casey's budget director, Michael Hershock, announced that the state was staring at a $1 billion shortfall. However, he dismissed the need for a major tax increase.
Less than two months later, Casey proposed $1.7 billion in tax increases. In August 1991, Casey signed a budget with $3.3 billion in new taxes.
Barbara Hafer, who was the state's auditor general and the unsuccessful Republican challenger to Casey's re-election in 1990, said the solution was as bad as the problem.
Legislators, she said, held the budget hostage by demanding money for their pet projects before they would vote for a tax package that they viewed as a political risk.
This time around, legislative leaders must exercise fiscal discipline, said Hafer, who later was elected as state treasurer.
"What is it going to take to pass that budget? That's the question you have to ask," Hafer said last week. "Legislators say, 'I need something to run on. I need (money for) my bridge, my street, my school district, my Little League, my baseball field, my fire department' and that becomes expensive."
In 1971, legislators finally closed a massive shortfall by passing the state's first income tax after a budget impasse that lasted more than a year.
Young warned of a repeat. Legislators may pull out all the stops this year to avoid a broad-based tax increase _ only to find that a still-worsening economy leaves them with no choice in 2010, just months before voters elect a new governor and nine out of 10 legislators, Young said.
"The prospect of a major tax increase in a major gubernatorial year is almost beyond imaginable," Young said. "This is a doomsday scenario that we may see."
If they wonder whether to vote for a major tax increase, legislators can consider this: Research by Young and Franklin & Marshall College pollster G. Terry Madonna found that voters are unlikely to take revenge on legislators because they supported a tax increase.
Re-election rates reached above 95 percent in the elections following tax increases in 1983 and 1991 _ leading Madonna and Young to call it the "great tax vote myth."
Tuesday, January 20, 2009
Budgetary restraint
From the BCCT.
Budgetary restraint
School boards must maximize tax relief.
There’s an important monetary deadline coming up, and we’re not talking about income tax day (although April 15 will be here soon enough). By the end of January, school boards have to decide whether they need to raise taxes more than the index designated by Act 1, the so-called property tax relief law.
We say “so-called” precisely because of the index provision, which allows school districts to raise taxes a certain amount without voter approval. That was the idea behind the legislation: To bring taxpayers more directly into the budget process. By some magic, most districts always manage to bring their increases in under the index, or use any of a number of exemptions to exceed their limit and still avoid going before voters.
Some officials say Act 1 is a good law and has, in fact, helped rein in out-of-control tax increases. A lot people disagree. They argue that the law gives school boards too much room to pass hefty yearly tax increases as they always have.
Anyway, for the 2009-10 school year, most districts in Bucks can boost taxes up to 4.1 percent without triggering a referendum. The way the economy is, and given the fact that many workers who still have jobs will see no increase in their salaries this year, 4.1 percent is a pretty significant hit. Remember, too, that the 4.1 ceiling could be higher in districts that claim an allowable exemption. Capital expenditures are one such item.
We understand there are times when prices have to rise, and in a down economy, such increases can hurt. We also understand the importance of education, and that good education costs money.
All that said, however, we implore school officials to work harder than ever to keep spending increases to an absolute minimum and challenge them not to view the 4.1 percent index (it’s higher in a few districts) as carte blanche to raise taxes by that amount.
While school boards have an obligation to provide quality education, they have an equal obligation to taxpayers to budget responsibly, particularly in difficult times such as these.
Budgetary restraint
School boards must maximize tax relief.
There’s an important monetary deadline coming up, and we’re not talking about income tax day (although April 15 will be here soon enough). By the end of January, school boards have to decide whether they need to raise taxes more than the index designated by Act 1, the so-called property tax relief law.
We say “so-called” precisely because of the index provision, which allows school districts to raise taxes a certain amount without voter approval. That was the idea behind the legislation: To bring taxpayers more directly into the budget process. By some magic, most districts always manage to bring their increases in under the index, or use any of a number of exemptions to exceed their limit and still avoid going before voters.
Some officials say Act 1 is a good law and has, in fact, helped rein in out-of-control tax increases. A lot people disagree. They argue that the law gives school boards too much room to pass hefty yearly tax increases as they always have.
Anyway, for the 2009-10 school year, most districts in Bucks can boost taxes up to 4.1 percent without triggering a referendum. The way the economy is, and given the fact that many workers who still have jobs will see no increase in their salaries this year, 4.1 percent is a pretty significant hit. Remember, too, that the 4.1 ceiling could be higher in districts that claim an allowable exemption. Capital expenditures are one such item.
We understand there are times when prices have to rise, and in a down economy, such increases can hurt. We also understand the importance of education, and that good education costs money.
All that said, however, we implore school officials to work harder than ever to keep spending increases to an absolute minimum and challenge them not to view the 4.1 percent index (it’s higher in a few districts) as carte blanche to raise taxes by that amount.
While school boards have an obligation to provide quality education, they have an equal obligation to taxpayers to budget responsibly, particularly in difficult times such as these.
Wednesday, January 14, 2009
Speed Limit: 4.1%
From the BCCT.
Act 1 limits most districts to 4.1 percent tax hike
School boards have until the end of January to determine whether they need to raise taxes more than their district’s index.
By JOAN HELLYER
Most school districts in Bucks and Eastern Montgomery counties will be allowed to raise property taxes 4.1 percent in the coming school year without seeking voter approval during the May primary.
Act 1, the state’s property tax relief law, includes an index rate for districts to adhere to when imposing property tax increases. Should a school board want to exceed its district’s state-determined index, it has to get voter approval in the primary election. So far that hasn’t happened.
A district’s index is determined by averaging the statewide average weekly wage with employment cost index data from the Bureau of Labor Statistics, according to state officials.
Bristol can increase its tax rate 5.3 percent and the Bristol Township tax rate can be increased 5.2 percent before voter approval is needed. All other area districts have to keep their tax increases to 4.1 percent or less.
The 2009-10 index is between threetenths and sixth-tenths of a percent less than the index for the current school year. District officials have cautioned school boards in early budget reviews that the index is likely to go lower in subsequent years.
A former state representative credits the indexes with reigning in increasing property taxes.
Prior to 2006 when Act 1 was established, the average property tax increase statewide was about 5 percent, said David Steil, a former state representative from Lower Makefield.
That average appears to be declining, Steil said.
The former lawmaker sees early indications of benefits from the relatively new tax relief law.
“Districts are more cognizant of how their money is being spent and where the expenditures are,” Steil said.
As has been the case for the past couple of years, Bristol Township officials are suggesting all district expenses can be covered with a tax increase lower than the index rate.
“We budget wisely and tightly,” explained Superintendent Ellen Budman. “We listen to our community and we empathize with all that they are going through during these difficult economic times.”
The Bristol Township school board is set to adopt a resolution next week promising to keep the increase below the index.
But not all area districts are so sure they will be able to stay below their state-determined index. Bristol and Bensalem, for example, are looking for ways to trim their projected tax rate increase, which initially exceeded what is allowed by the state.
School boards have until the end of January to decide if they need to raise taxes above the index. If they don’t, they have to say so in a resolution. If they do need to go above the index, they have to put the referendum on the May 19 ballot.
A point of contention for many taxpayers in recent years has been that a district’s actual tax rate increase can be more than the index when school systems claim exemptions for some expenses. Those exemptions include previously approved contracts and special education costs, according to Act 1.
The exemptions could potentially add one or more percentage points to the rate of increase allowed in a district’s millage rate.
Steil, the former lawmaker, said the exemptions are needed and they are fair.
“You want the school districts to be responsible for what they can control. Those areas [covered by the exemptions] they cannot control,” Steil said.
He said residents tired of property tax increases need to give Act 1 a chance to work at controlling district spending habits.
“I’m very confident if you will look at the average increases in spending in the five years following Act 1 and compare them to the five years preceding Act 1, you will see some significant changes,” Steil said.
Act 1 limits most districts to 4.1 percent tax hike
School boards have until the end of January to determine whether they need to raise taxes more than their district’s index.
By JOAN HELLYER
Most school districts in Bucks and Eastern Montgomery counties will be allowed to raise property taxes 4.1 percent in the coming school year without seeking voter approval during the May primary.
Act 1, the state’s property tax relief law, includes an index rate for districts to adhere to when imposing property tax increases. Should a school board want to exceed its district’s state-determined index, it has to get voter approval in the primary election. So far that hasn’t happened.
A district’s index is determined by averaging the statewide average weekly wage with employment cost index data from the Bureau of Labor Statistics, according to state officials.
Bristol can increase its tax rate 5.3 percent and the Bristol Township tax rate can be increased 5.2 percent before voter approval is needed. All other area districts have to keep their tax increases to 4.1 percent or less.
The 2009-10 index is between threetenths and sixth-tenths of a percent less than the index for the current school year. District officials have cautioned school boards in early budget reviews that the index is likely to go lower in subsequent years.
A former state representative credits the indexes with reigning in increasing property taxes.
Prior to 2006 when Act 1 was established, the average property tax increase statewide was about 5 percent, said David Steil, a former state representative from Lower Makefield.
That average appears to be declining, Steil said.
The former lawmaker sees early indications of benefits from the relatively new tax relief law.
“Districts are more cognizant of how their money is being spent and where the expenditures are,” Steil said.
As has been the case for the past couple of years, Bristol Township officials are suggesting all district expenses can be covered with a tax increase lower than the index rate.
“We budget wisely and tightly,” explained Superintendent Ellen Budman. “We listen to our community and we empathize with all that they are going through during these difficult economic times.”
The Bristol Township school board is set to adopt a resolution next week promising to keep the increase below the index.
But not all area districts are so sure they will be able to stay below their state-determined index. Bristol and Bensalem, for example, are looking for ways to trim their projected tax rate increase, which initially exceeded what is allowed by the state.
School boards have until the end of January to decide if they need to raise taxes above the index. If they don’t, they have to say so in a resolution. If they do need to go above the index, they have to put the referendum on the May 19 ballot.
A point of contention for many taxpayers in recent years has been that a district’s actual tax rate increase can be more than the index when school systems claim exemptions for some expenses. Those exemptions include previously approved contracts and special education costs, according to Act 1.
The exemptions could potentially add one or more percentage points to the rate of increase allowed in a district’s millage rate.
Steil, the former lawmaker, said the exemptions are needed and they are fair.
“You want the school districts to be responsible for what they can control. Those areas [covered by the exemptions] they cannot control,” Steil said.
He said residents tired of property tax increases need to give Act 1 a chance to work at controlling district spending habits.
“I’m very confident if you will look at the average increases in spending in the five years following Act 1 and compare them to the five years preceding Act 1, you will see some significant changes,” Steil said.
Monday, January 12, 2009
Transfer tax plunge pinching budgets
From the BCCT.
Transfer tax plunge pinching budgets
By: JENNA PORTNOY, Bucks County Courier Times
Bad news keeps coming for local governments and school districts that rely on real estate sales to generate revenue.
Taxes and fees collected by the Bucks and Montgomery counties' recorders of deeds were uniformly down in 2008, according to year-end figures released last week.
"We all know the economy is in a bad situation and that's reflected in the yearly report," said Bucks County Recorder of Deeds Ed Gudknecht.
Every time a property changes hands, the counties' elected recorders of deeds office levies a tax of 2 percent on the property's market value. Of that number, 1 percent goes to the state. The municipality and school district where the property is located split the other 1 percent. This levy is called the real estate transfer tax. A drop in overall sales has meant a dramatic decrease of nearly 20 percent for local governments.
The total transfer tax remitted to Bucks townships and boroughs was down about $4 million in 2008, compared with the 2007 total of $21 million. The same goes for 16 school districts.
In Montgomery County, school districts and municipalities lost $10 million - about 30 percent - in transfer tax collection.
The Hatboro-Horsham School District will bring in about 55 percent less transfer tax, for a hit of nearly $910,000, bringing the 2008 total to about $728,000.
Montgomery County Recorder of Deeds Nancy J. Becker said the school district is far from alone.
"It looks like the economy hit everyone, with an across-the-board decrease in the number of transactions and tax revenue, although the growth areas, such as the North Penn area, were hit the worst financially," she said.
New Hope-Solebury School District took the biggest percentage hit of Bucks' school districts. In 2007, the district brought in more than $1 million, but last year the number nose-dived more than 40 percent to about $600,000.
Gregory Hogg, the district's business administrator, said the number is significant considering current fiscal year revenues should total about $31 million.
"It is going to be reflected in next year's budget because we have to make up for that loss," he said, adding that he will present these and other numbers to the board Jan. 21.
Municipalities, however, have already had to grapple with decreases in various taxes and revenue streams in 2009 budgets passed last month.
Based on monthly transfer tax checks from the county, Doylestown Township predicted within a few thousand dollars that its figure would be down about 30 percent to about $456,000 in 2008.
The 2009 budget anticipates a similarly bleak view, said finance officer Bill Wightman.
"We have a balanced budget and we managed to do it without raising taxes. We knew we were getting less money," he said. "We know that the market out there is not too good."
Dismal sales affected other revenue streams collected by recorders of deeds. For example, in Bucks, about $3.4 billion worth of property changed hands in 2008, compared with $4.3 billion in 2007. Last year's figure represents the biggest drop since 2002.
Interest on the office's various bank accounts was down to about $38,000 last year, compared with four times as much in 2007. Finally, the office recorded 102,199 documents last year, the lowest figure since 1997.
"Times are bad," said Gudknecht, "but we just keep going on and hope things will improve."
Transfer tax plunge pinching budgets
By: JENNA PORTNOY, Bucks County Courier Times
Bad news keeps coming for local governments and school districts that rely on real estate sales to generate revenue.
Taxes and fees collected by the Bucks and Montgomery counties' recorders of deeds were uniformly down in 2008, according to year-end figures released last week.
"We all know the economy is in a bad situation and that's reflected in the yearly report," said Bucks County Recorder of Deeds Ed Gudknecht.
Every time a property changes hands, the counties' elected recorders of deeds office levies a tax of 2 percent on the property's market value. Of that number, 1 percent goes to the state. The municipality and school district where the property is located split the other 1 percent. This levy is called the real estate transfer tax. A drop in overall sales has meant a dramatic decrease of nearly 20 percent for local governments.
The total transfer tax remitted to Bucks townships and boroughs was down about $4 million in 2008, compared with the 2007 total of $21 million. The same goes for 16 school districts.
In Montgomery County, school districts and municipalities lost $10 million - about 30 percent - in transfer tax collection.
The Hatboro-Horsham School District will bring in about 55 percent less transfer tax, for a hit of nearly $910,000, bringing the 2008 total to about $728,000.
Montgomery County Recorder of Deeds Nancy J. Becker said the school district is far from alone.
"It looks like the economy hit everyone, with an across-the-board decrease in the number of transactions and tax revenue, although the growth areas, such as the North Penn area, were hit the worst financially," she said.
New Hope-Solebury School District took the biggest percentage hit of Bucks' school districts. In 2007, the district brought in more than $1 million, but last year the number nose-dived more than 40 percent to about $600,000.
Gregory Hogg, the district's business administrator, said the number is significant considering current fiscal year revenues should total about $31 million.
"It is going to be reflected in next year's budget because we have to make up for that loss," he said, adding that he will present these and other numbers to the board Jan. 21.
Municipalities, however, have already had to grapple with decreases in various taxes and revenue streams in 2009 budgets passed last month.
Based on monthly transfer tax checks from the county, Doylestown Township predicted within a few thousand dollars that its figure would be down about 30 percent to about $456,000 in 2008.
The 2009 budget anticipates a similarly bleak view, said finance officer Bill Wightman.
"We have a balanced budget and we managed to do it without raising taxes. We knew we were getting less money," he said. "We know that the market out there is not too good."
Dismal sales affected other revenue streams collected by recorders of deeds. For example, in Bucks, about $3.4 billion worth of property changed hands in 2008, compared with $4.3 billion in 2007. Last year's figure represents the biggest drop since 2002.
Interest on the office's various bank accounts was down to about $38,000 last year, compared with four times as much in 2007. Finally, the office recorded 102,199 documents last year, the lowest figure since 1997.
"Times are bad," said Gudknecht, "but we just keep going on and hope things will improve."
Sunday, January 11, 2009
Pickled??
From the BCCT.
Towns work through economic downturn
By JAMES MCGINNIS
So anxious he couldn’t sleep, Northampton township Manager Robert Pellegrino walked into budget meeting after budget meeting but gave the community only two options — raise taxes or lay off cops.
When people stopped buying homes, the tax on real estate transfers in Northampton fell more than $600,000. Pellegrino said he had “no cushion.”
And if the troubles of Wall Street continue to hit small town Main Street, other towns across Lower Bucks could be in the very same pickle next year.
Communities throughout the area are bracing for significantly lower returns on their investments, less revenue from building permits and fees, and higher costs on everything from insurance to road salt and even bullets. (Some police are paying nearly three times as much for ammunition thanks to the war in Iraq.)
Facing a $1.1 million deficit this year, Bristol Township will draw from a “dangerously low” cash reserve to balance the budget. Township Manager Jeff Bartlett warned that the town could run out of money in two or three years. But Councilman Rick Pluta said he was more worried about the poor. “If we raise taxes,” he said, “that could be someone’s prescription drug bill for the month.”
Bristol Township and its sister to the south seemed polar opposites this budget season. Bensalem will continue to spend big (and offer tax rebates) thanks to $10 million in casino host fees from Philadelphia Park and a $61 million nest egg from the sale of its sewer system. Still, Mayor Joseph DiGirolamo was cautious about the future.
Investments that generated $3.6 million in 2007 will yield only $2.1 million this year, Bensalem finance manager Jack McGinley estimated. Still there’s enough money for the $250 rebate check for the owners of every home in town.
Bensalem started offering its rebates in 2007. The people of Falls will get rebate checks for the first time in 2009 — $100 for every property owner and $50 for every business owner.
But that might seem a pittance compared to the $5,000 “gift” checks headed to all those who own property in Tullytown. Landfill fees will allow the borough to continue to provide the rebate checks and a large number of services this year, according to the budget.
Tullytown property taxes pay for the borough administration but wouldn’t be enough to cover expenses for police, public works or street repairs, as budgeted for 2009. Tullytown’s reliance on landfill income was cause for concern when then-outgoing borough manager Andy Warren presented his budget in October. Landfill income could begin to taper off in two to three years, leaving the borough in a pickle, he warned.
Already pickled, Morrisville — with the third-highest municipal property taxes in Lower Bucks — had to raise them another $70 this year.
When Mayor Thomas Wisnosky found out there wasn’t enough money for new police guns, he gave up his $2,900 salary. Wisnosky said some of the department’s guns were more than 20 years old.
Still some towns are managing to make ends meet. With some of the lowest municipal taxes in the area, Langhorne, Penndel, Newtown, Lower Southampton and Newtown Township will go without a tax increase again this year.
After finally paying off a municipal bond, officials in Bristol wanted to lower taxes this year. But any savings the borough hoped to realize are needed to balance the budget, borough Manager Jim Dillon told his council.
Middletown raised taxes $29 for the average resident to pay off debt.
Lower Makefield raised taxes $10 for the average resident to give more money to the Yardley-Makefield Fire Co. Wrightstown avoided a tax increase, cutting from the budget a $200,000 salt shed.
Even Yardley started the budget process in the hole, but it was hardly dramatic. The borough council announced an $82 deficit, but ended with a budgeted $3.70 surplus. So the community has at least a little money to sock away for 2010.
BIG TICKET ITEMS
Despite the economy, officials in Lower Bucks will spend millions of dollars on big-ticket items this year.
Bensalem will contribute $4.4 million to a planned athletic center adjacent to its high school and $5.5 million to expand the police department.
Falls will spend $2.5 million on a bigger senior center and another $1.2 million for a boat access on the Delaware River near Pennsbury Manor.
Newtown Township will spend $2.6 million on athletic fields and $8 million on a new municipal complex.
Middletown will spend $2.7 million on a new public works building.
Bristol will also spend $2 million on renovations to its police and fire departments, using about $1.6 million in grants.
UPDATED WITH GRAPHIC
Towns work through economic downturn
By JAMES MCGINNIS
So anxious he couldn’t sleep, Northampton township Manager Robert Pellegrino walked into budget meeting after budget meeting but gave the community only two options — raise taxes or lay off cops.
When people stopped buying homes, the tax on real estate transfers in Northampton fell more than $600,000. Pellegrino said he had “no cushion.”
And if the troubles of Wall Street continue to hit small town Main Street, other towns across Lower Bucks could be in the very same pickle next year.
Communities throughout the area are bracing for significantly lower returns on their investments, less revenue from building permits and fees, and higher costs on everything from insurance to road salt and even bullets. (Some police are paying nearly three times as much for ammunition thanks to the war in Iraq.)
Facing a $1.1 million deficit this year, Bristol Township will draw from a “dangerously low” cash reserve to balance the budget. Township Manager Jeff Bartlett warned that the town could run out of money in two or three years. But Councilman Rick Pluta said he was more worried about the poor. “If we raise taxes,” he said, “that could be someone’s prescription drug bill for the month.”
Bristol Township and its sister to the south seemed polar opposites this budget season. Bensalem will continue to spend big (and offer tax rebates) thanks to $10 million in casino host fees from Philadelphia Park and a $61 million nest egg from the sale of its sewer system. Still, Mayor Joseph DiGirolamo was cautious about the future.
Investments that generated $3.6 million in 2007 will yield only $2.1 million this year, Bensalem finance manager Jack McGinley estimated. Still there’s enough money for the $250 rebate check for the owners of every home in town.
Bensalem started offering its rebates in 2007. The people of Falls will get rebate checks for the first time in 2009 — $100 for every property owner and $50 for every business owner.
But that might seem a pittance compared to the $5,000 “gift” checks headed to all those who own property in Tullytown. Landfill fees will allow the borough to continue to provide the rebate checks and a large number of services this year, according to the budget.
Tullytown property taxes pay for the borough administration but wouldn’t be enough to cover expenses for police, public works or street repairs, as budgeted for 2009. Tullytown’s reliance on landfill income was cause for concern when then-outgoing borough manager Andy Warren presented his budget in October. Landfill income could begin to taper off in two to three years, leaving the borough in a pickle, he warned.
Already pickled, Morrisville — with the third-highest municipal property taxes in Lower Bucks — had to raise them another $70 this year.
When Mayor Thomas Wisnosky found out there wasn’t enough money for new police guns, he gave up his $2,900 salary. Wisnosky said some of the department’s guns were more than 20 years old.
Still some towns are managing to make ends meet. With some of the lowest municipal taxes in the area, Langhorne, Penndel, Newtown, Lower Southampton and Newtown Township will go without a tax increase again this year.
After finally paying off a municipal bond, officials in Bristol wanted to lower taxes this year. But any savings the borough hoped to realize are needed to balance the budget, borough Manager Jim Dillon told his council.
Middletown raised taxes $29 for the average resident to pay off debt.
Lower Makefield raised taxes $10 for the average resident to give more money to the Yardley-Makefield Fire Co. Wrightstown avoided a tax increase, cutting from the budget a $200,000 salt shed.
Even Yardley started the budget process in the hole, but it was hardly dramatic. The borough council announced an $82 deficit, but ended with a budgeted $3.70 surplus. So the community has at least a little money to sock away for 2010.
BIG TICKET ITEMS
Despite the economy, officials in Lower Bucks will spend millions of dollars on big-ticket items this year.
Bensalem will contribute $4.4 million to a planned athletic center adjacent to its high school and $5.5 million to expand the police department.
Falls will spend $2.5 million on a bigger senior center and another $1.2 million for a boat access on the Delaware River near Pennsbury Manor.
Newtown Township will spend $2.6 million on athletic fields and $8 million on a new municipal complex.
Middletown will spend $2.7 million on a new public works building.
Bristol will also spend $2 million on renovations to its police and fire departments, using about $1.6 million in grants.
UPDATED WITH GRAPHIC
Saturday, December 20, 2008
Who Needs a Referendum?
Apparently, the closing of an elementary school is not the same as the closing of the high school.
Board president William Hellmann said no decision about closing the high school would be made without going to referendum. He agreed to organize a meeting with all board members and community stake holders, including residents, students and teachers, to brainstorm ideas and discuss options for Morrisville going forward.
Ask the Emperor: Where's the referendum?
'It is our future'
By MANASEE WAGH
Bucks County Courier Times
An emotional crowd packed the Morrisville Middle/Senior High School auditorium Wednesday night in a show of support for keeping the 116-year-old high school together.
About 15 people spoke during the school board's public comment session, most giving impassioned statements against dissolving the school.
“We found a gem of a town,” William Martin said of his family's wish to move into Morrisville for its community and small school. If the students are sent to other, larger districts, like nearby Pennsbury, they would have little opportunity to join and excel in sports teams, the band, and other groups, said Martin, father of a student.
The large turnout at the meeting also included about 50 Middle/Senior High School students. Several, including student representative Kimberley Charles, expressed outrage at the board's unwillingness to allow them to speak longer after the end of the 45-minute public comment period.
“Let them speak!” was the often-repeated cry from students and other attendees.
Student Michael Leather said the school is too valuable to disband.
“The teachers here are our mentors for life,” he told the board. “Have a student poll and ask us what we want, since it is our future.”
John W. Jordan, the president of the Bucks County NAACP, also spoke during the public comment session, not only about keeping the school together, but also to point out a racial comment allegedly made by current Morrisville school board member Alfred Radosti.
“The NAACP is asking tonight for the resignation of Mr. Radosti,” said Jordan, whose speech elicited gasps from the crowd and sustained applause.
Jordan said Radosti made his comments in front of another former school board member, who did not want to be named. That member brought the matter to Jordan's attention, and he spoke to the Pennsylvania Department of Education's Civil Rights Division and the Pennsylvania Human Relations Commission.
“Certain things will not be tolerated,” said Jordan, also vice president of the state NAACP and a former Morrisville school board member. Jordan said he was talking to the state Department of Education to “check on what the board is doing.”
Jordan also addressed concerns that programs might be cut to accommodate financial issues.
After public comment, Superintendent Elizabeth Yonson said that neither programs nor textbooks were slated to be cut at this point.
“We looked at the contingency fund of $120,000,” she said, adding that it could be used in place of raising taxes above the state mandated 4.4 percent index.
In an agenda meeting two weeks ago, the board decided to forego applying for state exceptions, which would allow the district to raise taxes above the index to cope with uncontrollable costs.
About two weeks ago it was revealed that some members of the new Morrisville school board majority contacted local school systems to see if they would be interested in accepting its high school students on a tuition basis. This was reportedly one option to relieve financial and other stresses in the district.
Board president William Hellmann said no decision about closing the high school would be made without going to referendum. He agreed to organize a meeting with all board members and community stake holders, including residents, students and teachers, to brainstorm ideas and discuss options for Morrisville going forward.
Staff writer Kate Fratti contributed to this article. Manasee Wagh can be reached at 215-949-4206 or mwagh@phillyburbs.com. Kate Fratti can be reached at 215-949-4179 or kfratti@phillyBurbs.com.
January 24, 2008 6:29 AM
Board president William Hellmann said no decision about closing the high school would be made without going to referendum. He agreed to organize a meeting with all board members and community stake holders, including residents, students and teachers, to brainstorm ideas and discuss options for Morrisville going forward.
Ask the Emperor: Where's the referendum?
'It is our future'
By MANASEE WAGH
Bucks County Courier Times
An emotional crowd packed the Morrisville Middle/Senior High School auditorium Wednesday night in a show of support for keeping the 116-year-old high school together.
About 15 people spoke during the school board's public comment session, most giving impassioned statements against dissolving the school.
“We found a gem of a town,” William Martin said of his family's wish to move into Morrisville for its community and small school. If the students are sent to other, larger districts, like nearby Pennsbury, they would have little opportunity to join and excel in sports teams, the band, and other groups, said Martin, father of a student.
The large turnout at the meeting also included about 50 Middle/Senior High School students. Several, including student representative Kimberley Charles, expressed outrage at the board's unwillingness to allow them to speak longer after the end of the 45-minute public comment period.
“Let them speak!” was the often-repeated cry from students and other attendees.
Student Michael Leather said the school is too valuable to disband.
“The teachers here are our mentors for life,” he told the board. “Have a student poll and ask us what we want, since it is our future.”
John W. Jordan, the president of the Bucks County NAACP, also spoke during the public comment session, not only about keeping the school together, but also to point out a racial comment allegedly made by current Morrisville school board member Alfred Radosti.
“The NAACP is asking tonight for the resignation of Mr. Radosti,” said Jordan, whose speech elicited gasps from the crowd and sustained applause.
Jordan said Radosti made his comments in front of another former school board member, who did not want to be named. That member brought the matter to Jordan's attention, and he spoke to the Pennsylvania Department of Education's Civil Rights Division and the Pennsylvania Human Relations Commission.
“Certain things will not be tolerated,” said Jordan, also vice president of the state NAACP and a former Morrisville school board member. Jordan said he was talking to the state Department of Education to “check on what the board is doing.”
Jordan also addressed concerns that programs might be cut to accommodate financial issues.
After public comment, Superintendent Elizabeth Yonson said that neither programs nor textbooks were slated to be cut at this point.
“We looked at the contingency fund of $120,000,” she said, adding that it could be used in place of raising taxes above the state mandated 4.4 percent index.
In an agenda meeting two weeks ago, the board decided to forego applying for state exceptions, which would allow the district to raise taxes above the index to cope with uncontrollable costs.
About two weeks ago it was revealed that some members of the new Morrisville school board majority contacted local school systems to see if they would be interested in accepting its high school students on a tuition basis. This was reportedly one option to relieve financial and other stresses in the district.
Board president William Hellmann said no decision about closing the high school would be made without going to referendum. He agreed to organize a meeting with all board members and community stake holders, including residents, students and teachers, to brainstorm ideas and discuss options for Morrisville going forward.
Staff writer Kate Fratti contributed to this article. Manasee Wagh can be reached at 215-949-4206 or mwagh@phillyburbs.com. Kate Fratti can be reached at 215-949-4179 or kfratti@phillyBurbs.com.
January 24, 2008 6:29 AM
Wednesday, December 17, 2008
Borough Council Sez: Open Your Wallets Wider, Please
From the BCCT.
Kudos to Hizzoner. I'm not all that happy that the current condition of our police department is posted for public consumption. However, Tom Wisnosky's generosity is a genuine piece of good news coming from a rather grim week of news featuring the 'Ville.
Council approves budget with $70 tax hike
The mayor is donating his 2009 salary for new guns for police officers.
By DANNY ADLER
STAFF WRITER
Morrisville residents will pay about $70 more next year in municipal property taxes, according to a final budget approved unanimously this week by the council.
On Monday it approved a $5.77 million spending plan — up about $500,000 from this year’s budget — with increased expenses for public works, emergency services and rising sanitation charges.
The millage will increase 3.5 mills to 39.43 mills next year and a homeowner with a property assessed at the borough average of $20,000 will pay about $788 in borough taxes, about $70 more than this year.
One mill, or about $60,000, of the tax hike is allocated for public works trucks and equipment. Another mill will go to the Morrisville Fire Co. for new fire equipment. One and a half mills of the increase, roughly $90,000, are set for the Morrisville Ambulance Squad after being approved by voter referendum.
The residential sanitation charges are set at $357, a $15 increase. The commercial charge will increase $26 to $606. The sanitation increases make up for rising costs by the borough’s trash hauler, Allied Waste Services.
The largest expense for the borough continues to be its police department, accounting for $1.53 million of borough spending.
With a $60,000 increase for the police department budget over this year’s, the borough will fork out money for higher department salaries, as well as office and equipment improvements.
Mayor Thomas Wisnosky said Monday night that he will donate his $2,900 salary next year to the police department so it can purchase new guns for its officers.
Wisnosky said the department uses weapons that are “20-some years old.” “That’s way too old,” the mayor said.
Kudos to Hizzoner. I'm not all that happy that the current condition of our police department is posted for public consumption. However, Tom Wisnosky's generosity is a genuine piece of good news coming from a rather grim week of news featuring the 'Ville.
Council approves budget with $70 tax hike
The mayor is donating his 2009 salary for new guns for police officers.
By DANNY ADLER
STAFF WRITER
Morrisville residents will pay about $70 more next year in municipal property taxes, according to a final budget approved unanimously this week by the council.
On Monday it approved a $5.77 million spending plan — up about $500,000 from this year’s budget — with increased expenses for public works, emergency services and rising sanitation charges.
The millage will increase 3.5 mills to 39.43 mills next year and a homeowner with a property assessed at the borough average of $20,000 will pay about $788 in borough taxes, about $70 more than this year.
One mill, or about $60,000, of the tax hike is allocated for public works trucks and equipment. Another mill will go to the Morrisville Fire Co. for new fire equipment. One and a half mills of the increase, roughly $90,000, are set for the Morrisville Ambulance Squad after being approved by voter referendum.
The residential sanitation charges are set at $357, a $15 increase. The commercial charge will increase $26 to $606. The sanitation increases make up for rising costs by the borough’s trash hauler, Allied Waste Services.
The largest expense for the borough continues to be its police department, accounting for $1.53 million of borough spending.
With a $60,000 increase for the police department budget over this year’s, the borough will fork out money for higher department salaries, as well as office and equipment improvements.
Mayor Thomas Wisnosky said Monday night that he will donate his $2,900 salary next year to the police department so it can purchase new guns for its officers.
Wisnosky said the department uses weapons that are “20-some years old.” “That’s way too old,” the mayor said.
Tuesday, December 16, 2008
Pension Fund Increases Hitting Budget in 2012
From the Inquirer.
The article says "planning could lessen the impact".
We all know what the Emperor thinks about planning.
Pa. teacher pension agency says outlook worsens
The Associated Press, Posted on Fri, Dec. 12, 2008
HARRISBURG, Pa. - Pennsylvania's public school pension fund says school districts should try to start saving for an expected increase in costs starting in 2012.
The Public School Employees Retirement System announced Friday that the amount of payroll that school districts and the state will have to contribute that year is now expected to be more than 16 percent, up from earlier projections of about 11 percent.
The system's board of trustees says next year's employer contribution rate will be just under 5 percent, fractionally higher than the current year's.
Pension system officials say planning could lessen the impact of the dramatic increase expected to hit in four years.
The pension fund's investment portfolio was $55 billion at the end of September.
-------------------------------------------------------
Friday, December 12, 2008
PA school pension subsidy will nearly quadruple to $2.3B by 2012-13
New data from the Pennsylvania Public School Employees' Retirement System projects taxpayers' "employer contribution" to school teacher and administrator pension and retiree health care will nearly quadruple by 2012-13, to $3.2 billion, from $595 million this year.
Pensions for retired teachers and administrators are paid partly by investment profits, and partly by teacher payroll deductions; the rest is funded by state and school district taxpayers. Under the current subsidy formula, which takes into account investment profits and losses for the past several years, next year's contribution rate will go up only slightly, to 4.78 percent next year, from the current 4.76 percent, but the rate will make a "dramatic" increase in 2012-13, more than tripling to 16.40 percent, executive director Jeffrey B. Clay warned.
The actual cost will go up even faster than the rate, because the state expects teacher payroll to zoom to $14.1 billion, from $12.5 billion. Clay urged Pennsylvania school boards to set aside money for the increase now, despite the weak economy, because the state is losing money on its pension fund investments as values fall.
The article says "planning could lessen the impact".
We all know what the Emperor thinks about planning.
Pa. teacher pension agency says outlook worsens
The Associated Press, Posted on Fri, Dec. 12, 2008
HARRISBURG, Pa. - Pennsylvania's public school pension fund says school districts should try to start saving for an expected increase in costs starting in 2012.
The Public School Employees Retirement System announced Friday that the amount of payroll that school districts and the state will have to contribute that year is now expected to be more than 16 percent, up from earlier projections of about 11 percent.
The system's board of trustees says next year's employer contribution rate will be just under 5 percent, fractionally higher than the current year's.
Pension system officials say planning could lessen the impact of the dramatic increase expected to hit in four years.
The pension fund's investment portfolio was $55 billion at the end of September.
-------------------------------------------------------
Friday, December 12, 2008
PA school pension subsidy will nearly quadruple to $2.3B by 2012-13
New data from the Pennsylvania Public School Employees' Retirement System projects taxpayers' "employer contribution" to school teacher and administrator pension and retiree health care will nearly quadruple by 2012-13, to $3.2 billion, from $595 million this year.
Pensions for retired teachers and administrators are paid partly by investment profits, and partly by teacher payroll deductions; the rest is funded by state and school district taxpayers. Under the current subsidy formula, which takes into account investment profits and losses for the past several years, next year's contribution rate will go up only slightly, to 4.78 percent next year, from the current 4.76 percent, but the rate will make a "dramatic" increase in 2012-13, more than tripling to 16.40 percent, executive director Jeffrey B. Clay warned.
The actual cost will go up even faster than the rate, because the state expects teacher payroll to zoom to $14.1 billion, from $12.5 billion. Clay urged Pennsylvania school boards to set aside money for the increase now, despite the weak economy, because the state is losing money on its pension fund investments as values fall.
State Health Insurance?
From the BCCT.
Pa. school boards resist state health insurance
By MARTHA RAFFAELE
The Associated Press
HARRISBURG, Pa. - The spiraling cost of health care is a constant lament of Pennsylvania school boards whenever they draw up their annual budgets.
Their consternation, however, wasn't enough to overcome their skepticism during the 2007-08 legislative session about a proposal that Gov. Ed Rendell said could reduce those expenses , and rein in property-tax increases.
With great fanfare, Rendell in September 2007 advocated legislation to create a special benefits board to look into establishing a statewide health insurance plan for all of the state's school districts. A handful of other states have adopted similar approaches.
A bill was introduced in the House, but it stalled in committee and died when the General Assembly's session concluded last month.
A statewide plan would help control school employee health benefit costs by spreading the risk more widely, managing benefits better and lowering school administrative costs, Rendell said. In a trade-off, employee unions would give up the right to bargain for better health insurance benefits during contract negotiations.
Rendell has said school districts spend about $1.5 billion annually on medical and prescription drug insurance, or $1 out of every $6 in school property taxes collected. A 2004 legislative study said school districts could save up to $585 million a year, and more in later years, under a statewide insurance plan.
Many districts now buy individual group policies, while some districts have formed regional insurance-buying consortiums and others buy separate policies for professional and service employees.
House Democrats, who control the flow of legislation in that chamber, didn't advance the measure because of resistance from their home school districts, said Bob Caton, a caucus spokesman.
"Members heard from their districts that they were already participating in a regional group insurance program and were afraid their costs would increase and benefits lessen," Caton said.
Rendell spokesman Chuck Ardo called that argument a "stalling tactic."
"From a business perspective, the opposite makes far more sense: If we aggregate our purchasing power, we can buy more for less money," he said. "The truth is that we won't know for sure until we get the data, and that's why the bill makes it possible to determine whether it's feasible to run a statewide system and , if it is , launch it."
Although Rendell has said the state would pay up to half of the year-to-year increase in health insurance premiums, the bill imposes certain limits, said Jay Himes, executive director of the Pennsylvania Association of School Business Officials.
"When you look at the details, the state's share is capped," Himes said. "So, if in a year there gets to be extraordinary rate increases, then school districts are left holding the financial bag."
The Pennsylvania School Boards Association saw problems with the benefits board's composition, lobbyist Tim Allwein said.
The House bill initially called for a 12-member board, drawing four members each from unionized school employees and school boards. But later versions of the bill expanded the board's membership to 20 and gave school employees 10 seats.
"If you essentially have a plan where you've got employees calling the shots regarding their benefits, you're not going to get a plan that saves the most money," Allwein said.
The Pennsylvania State Education Association, the state's largest teachers union, supported the legislation. Association president James Testerman said his group did not push for expanding union membership on the board.
Testerman also disputed PSBA's contention that the union would hold sway over the board. Testerman noted that the state also has a role as a school employer, and the board would include legislative members.
Additionally, any decision to implement either a statewide plan or an alternative plan to reduce health-care costs would require at least 15 votes under the bill.
"Even if all of labor sticks together, they still need to go and find five other votes," Testerman said.
Ardo said the administration expects to renew its push in the upcoming legislative session that begins in January.
"Particularly when the economy is as bad as it is today, it's more important than ever that we figure out ways to save money for taxpayers while making government work smarter," he said.
,,,
Martha Raffaele covers education and health care for The Associated Press in Harrisburg. She can be reached at mraffaele(at)ap.org.
Pa. school boards resist state health insurance
By MARTHA RAFFAELE
The Associated Press
HARRISBURG, Pa. - The spiraling cost of health care is a constant lament of Pennsylvania school boards whenever they draw up their annual budgets.
Their consternation, however, wasn't enough to overcome their skepticism during the 2007-08 legislative session about a proposal that Gov. Ed Rendell said could reduce those expenses , and rein in property-tax increases.
With great fanfare, Rendell in September 2007 advocated legislation to create a special benefits board to look into establishing a statewide health insurance plan for all of the state's school districts. A handful of other states have adopted similar approaches.
A bill was introduced in the House, but it stalled in committee and died when the General Assembly's session concluded last month.
A statewide plan would help control school employee health benefit costs by spreading the risk more widely, managing benefits better and lowering school administrative costs, Rendell said. In a trade-off, employee unions would give up the right to bargain for better health insurance benefits during contract negotiations.
Rendell has said school districts spend about $1.5 billion annually on medical and prescription drug insurance, or $1 out of every $6 in school property taxes collected. A 2004 legislative study said school districts could save up to $585 million a year, and more in later years, under a statewide insurance plan.
Many districts now buy individual group policies, while some districts have formed regional insurance-buying consortiums and others buy separate policies for professional and service employees.
House Democrats, who control the flow of legislation in that chamber, didn't advance the measure because of resistance from their home school districts, said Bob Caton, a caucus spokesman.
"Members heard from their districts that they were already participating in a regional group insurance program and were afraid their costs would increase and benefits lessen," Caton said.
Rendell spokesman Chuck Ardo called that argument a "stalling tactic."
"From a business perspective, the opposite makes far more sense: If we aggregate our purchasing power, we can buy more for less money," he said. "The truth is that we won't know for sure until we get the data, and that's why the bill makes it possible to determine whether it's feasible to run a statewide system and , if it is , launch it."
Although Rendell has said the state would pay up to half of the year-to-year increase in health insurance premiums, the bill imposes certain limits, said Jay Himes, executive director of the Pennsylvania Association of School Business Officials.
"When you look at the details, the state's share is capped," Himes said. "So, if in a year there gets to be extraordinary rate increases, then school districts are left holding the financial bag."
The Pennsylvania School Boards Association saw problems with the benefits board's composition, lobbyist Tim Allwein said.
The House bill initially called for a 12-member board, drawing four members each from unionized school employees and school boards. But later versions of the bill expanded the board's membership to 20 and gave school employees 10 seats.
"If you essentially have a plan where you've got employees calling the shots regarding their benefits, you're not going to get a plan that saves the most money," Allwein said.
The Pennsylvania State Education Association, the state's largest teachers union, supported the legislation. Association president James Testerman said his group did not push for expanding union membership on the board.
Testerman also disputed PSBA's contention that the union would hold sway over the board. Testerman noted that the state also has a role as a school employer, and the board would include legislative members.
Additionally, any decision to implement either a statewide plan or an alternative plan to reduce health-care costs would require at least 15 votes under the bill.
"Even if all of labor sticks together, they still need to go and find five other votes," Testerman said.
Ardo said the administration expects to renew its push in the upcoming legislative session that begins in January.
"Particularly when the economy is as bad as it is today, it's more important than ever that we figure out ways to save money for taxpayers while making government work smarter," he said.
,,,
Martha Raffaele covers education and health care for The Associated Press in Harrisburg. She can be reached at mraffaele(at)ap.org.
Wednesday, December 10, 2008
Rendell targets budget shortfall
From the BCCT.
Why is it sounding like the budget process is now akin to the RMS Titanic and we're all sitting in the 4th class steerage section waiting for the porter to return with some ice?
Rendell targets budget shortfall
A combination of spending cuts, federal money, funds from gas drilling leases and some reserves will be used to make up revenue losses.
By MARC LEVY
HARRISBURG — Gov. Ed Rendell plans to offset an estimated $1.6 billion hole in Pennsylvania’s budget this year with spending cuts and money from reserves, gas-drilling leases in state forests and an anticipated federal aid package.
Rendell revealed his plans, and the gaping shortfall projection, Tuesday at a traditional midyear budget briefing for state legislators, who generally reacted positively to what they heard.
The rapidly deteriorating economy has left Pennsylvania and dozens of other states with a shortfall this year, Rendell said. For now, Rendell said his goal is to weather the volatile economy in the next year-and-a-half without a broad-based tax increase or layoffs, or any further budget cuts, until the new fiscal year begins in July.
Cuts announced so far have hit a broad array of programs, from highway and local road improvements to help for the poor, handicapped and neglected. Thousands of nonunion state employees also will go without a costof-living salary increase.
“It’s a good first step, but the numbers are bleak,” said Republican state Rep. Marguerite Quinn of the 143rd District, which includes parts of Central and Upper Bucks. “More cuts need to be made. It’s not an easy position to be in but the job has to be done. We just have to make sure we’re making necessary cuts and live within our means.”
State Rep. Rick Taylor, a Democrat from the 151st District, which includes parts of Horsham and Montgomery Township, said, “The fact that both the governor and the leadership believe we should raise taxes only as a last resort is good news for all of us, especially in this tough economy when people are losing their jobs.”
The Democratic governor pledged to work cooperatively on the plan with lawmakers, whose approval of some aspects of the plan will be necessary, and he appealed for understanding from people and organizations that are hurting from a loss of state money and services.
“We’re going to try to make the cuts we have to make in a way that still preserves our ability to grow and still preserves the services you need,” Rendell said at the briefing at the State Museum auditorium in Harrisburg. “We’re going to do it in a responsible way, because this is a crisis. Hopefully it will be a short-lived crisis.”
State Sen. Rob Wonderling, a Republican whose 24th District includes parts of Upper Bucks and Montgomery County, said, “There are no sacred cows. All facets and assets of government should be subject to scrutiny. But I’d be very careful about cutting help and support for those at the greatest disadvantage who are the most vulnerable.”
In July, Rendell signed a $28.3 billion budget, an increase of about 4 percent over last year’s budget. But through the end of November, state tax collections ran nearly 7 percent behind expectations. If the shortfall continues at that rate, the state will face a nearly $2 billion deficit when the fiscal year ends in June.
Rendell said Tuesday that his administration is projecting a $1.6 billion shortfall, a number that he cautioned could change as the nation’s unpredictable economic future unfolds.
“There’s no surety to that $1.6 billion figure,” Rendell said. “We think $1.6 billion is a conservative estimate. It could be better, and obviously it could be worse, so this will be a work in progress.”
The plan to offset it includes $500 million in cuts that Rendell has already requested from across state government and its independent agencies, including the courts and Legislature.
Rendell wants to take half the state’s budgetary reserve — or $375 million — plus another $101 million sitting idle in various program accounts that was committed in past years but never spent.
He also plans to divert $174 million from leases that allow five exploration companies to drill for natural gas on publicly owned state forest land in northern Pennsylvania. The money was slated for the state’s Oil and Gas Lease Fund, which is reserved for improvements to the state parks and forests.
In addition, Rendell said he is estimating that the federal government will approve an aid package for state governments.
“I fully expect that the commonwealth will receive the federal stimulus funding that President-elect Barack Obama spoke of last week,” Rendell said. “We anticipate receiving $450 million this fiscal year. Those funds will allow us to preserve the remainder of the Rainy Day Fund until 2009-10.”
Asked if that meant the stimulus would not be used to create jobs, Rendell spokesman Chuck Ardo said, “No, it means we will not have to dip as deeply into the rainy day fund as we might if no help from Washington were forthcoming.”
House Minority Leader Sam Smith of Jefferson County said he generally approved of Rendell’s handling of the deficit, and suggested that House Republicans are willing to contribute some of the estimated $240 million legislative reserve to the deficit plan.
However, Smith warned that the real challenge will be handling the increasing pressure on the state’s finances in the 2009-10 fiscal year. The woeful outlook on tax collections virtually assures that state government will be unable to increase spending, he said.
Why is it sounding like the budget process is now akin to the RMS Titanic and we're all sitting in the 4th class steerage section waiting for the porter to return with some ice?
Rendell targets budget shortfall
A combination of spending cuts, federal money, funds from gas drilling leases and some reserves will be used to make up revenue losses.
By MARC LEVY
HARRISBURG — Gov. Ed Rendell plans to offset an estimated $1.6 billion hole in Pennsylvania’s budget this year with spending cuts and money from reserves, gas-drilling leases in state forests and an anticipated federal aid package.
Rendell revealed his plans, and the gaping shortfall projection, Tuesday at a traditional midyear budget briefing for state legislators, who generally reacted positively to what they heard.
The rapidly deteriorating economy has left Pennsylvania and dozens of other states with a shortfall this year, Rendell said. For now, Rendell said his goal is to weather the volatile economy in the next year-and-a-half without a broad-based tax increase or layoffs, or any further budget cuts, until the new fiscal year begins in July.
Cuts announced so far have hit a broad array of programs, from highway and local road improvements to help for the poor, handicapped and neglected. Thousands of nonunion state employees also will go without a costof-living salary increase.
“It’s a good first step, but the numbers are bleak,” said Republican state Rep. Marguerite Quinn of the 143rd District, which includes parts of Central and Upper Bucks. “More cuts need to be made. It’s not an easy position to be in but the job has to be done. We just have to make sure we’re making necessary cuts and live within our means.”
State Rep. Rick Taylor, a Democrat from the 151st District, which includes parts of Horsham and Montgomery Township, said, “The fact that both the governor and the leadership believe we should raise taxes only as a last resort is good news for all of us, especially in this tough economy when people are losing their jobs.”
The Democratic governor pledged to work cooperatively on the plan with lawmakers, whose approval of some aspects of the plan will be necessary, and he appealed for understanding from people and organizations that are hurting from a loss of state money and services.
“We’re going to try to make the cuts we have to make in a way that still preserves our ability to grow and still preserves the services you need,” Rendell said at the briefing at the State Museum auditorium in Harrisburg. “We’re going to do it in a responsible way, because this is a crisis. Hopefully it will be a short-lived crisis.”
State Sen. Rob Wonderling, a Republican whose 24th District includes parts of Upper Bucks and Montgomery County, said, “There are no sacred cows. All facets and assets of government should be subject to scrutiny. But I’d be very careful about cutting help and support for those at the greatest disadvantage who are the most vulnerable.”
In July, Rendell signed a $28.3 billion budget, an increase of about 4 percent over last year’s budget. But through the end of November, state tax collections ran nearly 7 percent behind expectations. If the shortfall continues at that rate, the state will face a nearly $2 billion deficit when the fiscal year ends in June.
Rendell said Tuesday that his administration is projecting a $1.6 billion shortfall, a number that he cautioned could change as the nation’s unpredictable economic future unfolds.
“There’s no surety to that $1.6 billion figure,” Rendell said. “We think $1.6 billion is a conservative estimate. It could be better, and obviously it could be worse, so this will be a work in progress.”
The plan to offset it includes $500 million in cuts that Rendell has already requested from across state government and its independent agencies, including the courts and Legislature.
Rendell wants to take half the state’s budgetary reserve — or $375 million — plus another $101 million sitting idle in various program accounts that was committed in past years but never spent.
He also plans to divert $174 million from leases that allow five exploration companies to drill for natural gas on publicly owned state forest land in northern Pennsylvania. The money was slated for the state’s Oil and Gas Lease Fund, which is reserved for improvements to the state parks and forests.
In addition, Rendell said he is estimating that the federal government will approve an aid package for state governments.
“I fully expect that the commonwealth will receive the federal stimulus funding that President-elect Barack Obama spoke of last week,” Rendell said. “We anticipate receiving $450 million this fiscal year. Those funds will allow us to preserve the remainder of the Rainy Day Fund until 2009-10.”
Asked if that meant the stimulus would not be used to create jobs, Rendell spokesman Chuck Ardo said, “No, it means we will not have to dip as deeply into the rainy day fund as we might if no help from Washington were forthcoming.”
House Minority Leader Sam Smith of Jefferson County said he generally approved of Rendell’s handling of the deficit, and suggested that House Republicans are willing to contribute some of the estimated $240 million legislative reserve to the deficit plan.
However, Smith warned that the real challenge will be handling the increasing pressure on the state’s finances in the 2009-10 fiscal year. The woeful outlook on tax collections virtually assures that state government will be unable to increase spending, he said.
Wednesday, November 26, 2008
Where's Chicken Little When You Need Him?
From Forbes Magazine.
Pa. teacher, government pension funds post losses
By MARK SCOLFORO , 11.25.08, 05:00 PM EST
Pennsylvania's massive state government and teacher pension funds reported double-digit declines Tuesday, losses that reflect returns through September but not the market's continued fall since then.
And officials with both systems warned that year-end totals could be even worse.
From July 1 through Sept. 30, the two funds fell by more than $12 billion, or nearly half the size of the current state budget.
The State Employees' Retirement System said its investments fell about 14.4 percent from January through September, while the larger Public School Employees' Retirement System's investments dropped 16.7 percent for the one-year period ending Sept. 30.
The government workers' pension fund shed $4.3 billion dollars from July 1 though Sept. 30, ending the period with a value of $29.3 billion. The teacher fund, the nation's 14th largest public defined-benefit pension fund, lost $8 billion over the same three-month period to a value of $54.7 billion.
The stock market has experienced steep declines in October and November, and the two pension funds warned that their year-end accounting may end up looking worse.
In a statement, the state employees' pension fund said its investment performance in 2008 closely mirrored that of other large public pension funds in a prominent national comparison service.
Over the past decade, the State Employees' Retirement System has produced 8 percent a year on its investments, compared with a median of 5.6 percent for the large pension funds measured by the Wilshire Trust Universe Comparison Service.
For 2007, the system earned 17.2 percent, a $5 billion windfall that was among the best in the nation. By comparison, the S&P 500 grew by 5.49 percent in 2007.
The investment returns are bad news for state government retirees who have been pressuring the Legislature for a cost-of-living increase. Such increases are not automatic.
But state tax revenues for the current year are running hundreds of millions of dollars below expectations, and the decline in pension fund investments raises the likelihood taxpayers will have to pump in billions more to balance the retirement funds even without a cost of living adjustment.
Pa. teacher, government pension funds post losses
By MARK SCOLFORO , 11.25.08, 05:00 PM EST
Pennsylvania's massive state government and teacher pension funds reported double-digit declines Tuesday, losses that reflect returns through September but not the market's continued fall since then.
And officials with both systems warned that year-end totals could be even worse.
From July 1 through Sept. 30, the two funds fell by more than $12 billion, or nearly half the size of the current state budget.
The State Employees' Retirement System said its investments fell about 14.4 percent from January through September, while the larger Public School Employees' Retirement System's investments dropped 16.7 percent for the one-year period ending Sept. 30.
The government workers' pension fund shed $4.3 billion dollars from July 1 though Sept. 30, ending the period with a value of $29.3 billion. The teacher fund, the nation's 14th largest public defined-benefit pension fund, lost $8 billion over the same three-month period to a value of $54.7 billion.
The stock market has experienced steep declines in October and November, and the two pension funds warned that their year-end accounting may end up looking worse.
In a statement, the state employees' pension fund said its investment performance in 2008 closely mirrored that of other large public pension funds in a prominent national comparison service.
Over the past decade, the State Employees' Retirement System has produced 8 percent a year on its investments, compared with a median of 5.6 percent for the large pension funds measured by the Wilshire Trust Universe Comparison Service.
For 2007, the system earned 17.2 percent, a $5 billion windfall that was among the best in the nation. By comparison, the S&P 500 grew by 5.49 percent in 2007.
The investment returns are bad news for state government retirees who have been pressuring the Legislature for a cost-of-living increase. Such increases are not automatic.
But state tax revenues for the current year are running hundreds of millions of dollars below expectations, and the decline in pension fund investments raises the likelihood taxpayers will have to pump in billions more to balance the retirement funds even without a cost of living adjustment.
Monday, November 10, 2008
It's The Economy, Stupid!
From the BCCT.
That was James Carville's famous strategy in the Clinton campaign of 1992. I doubt there's anyone out there who is NOT concerned about the economy and the impact on the bottom line. "Today’s economy will affect the preparation of school budgets as far ahead as 2012 and 2013, he added." Perhaps so, but let's be a little more focused on the immediate: What's the state of revenues and expenditures in 2008-09?
Economy has schools concerned
A lag in tax collections and underperforming investments means schools might need to do more with less in the coming years or find support for a tax increase.
By THERESA HEGEL
Like the families that help to support them, school districts in the area have entered a period of belt tightening.
District business managers already dealing with drops in tax revenue and dwindling investment returns say the budget for the next school year likely will be difficult to prepare.
But most districts said administration and school boards were committed to keeping property tax millage increases at or under the 4.1 percent mandated by the state.
“The whole community is suffering,” said Pennridge Superintendent Robert Kish, noting that his district wasn’t interested in adding to the burden.
Real estate transfer taxes and interim real estate taxes — levied when properties are bought and sold or when improvements are made to an existing property — are, in many cases, down from last year’s levels.
“Homes aren’t selling,” said Robert Reichert, director of business affairs for Hatboro-Horsham School District. “People aren’t doing renovation work like they were.”
In terms of real estate transfer taxes, Pennridge received 81 percent of the level of revenue this July, August and September, when compared with last year’s intake in those months, said business administrator Bob Reinhart.
Last year’s transfer tax total of $1.6 million already represented a dip from years when the housing market was hot. Back in 2005-06, the district reaped $2.1 million from transfer taxes, he said.
So far this school year, the district is receiving 54 percent of the interim taxes it received last year, Reinhart said.
“If [the housing market slump] deepens, the issues are going to get worse than they are today,” he said.
Today’s economy will affect the preparation of school budgets as far ahead as 2012 and 2013, he added.
Bensalem School District built lower revenues into its budget, including a 30 percent decline in interim taxes and a 25 percent drop in transfer taxes.
“I’m pleased that we did take a conservative stance with respect to projected revenues,” said Jack Myers, Bensalem’s director of business operations.
By September, Bensalem had already collected $300,000 of its budgeted $1 million in transfer taxes, which Myers called a “pleasant surprise.”
Still, being on target is more a reflection of the district’s downward projections, and there are still eight months left in the fiscal year, he said.
“At this point, I’m not panicking, but I’m worried,” added Myers, who said he is constantly monitoring and “fine-tuning” the budget.
Central Bucks business manager Dave Matyas was also concerned about the 1 percent earned income tax going south if unemployment levels rise and workers don’t receive raises or bonuses because of the economy.
“Who knows where that’s going to go?” he wondered.
An unstable stock market and cuts in federal interest rates have taken their toll on districts’ coffers.
In its current budget, Bensalem assumed a 40 percent drop in interest returns for the year, Myers said.
Reichert said Hatboro-Horsham, which invests conservatively, has seen its returns cut almost in half from last year. “That’s having an effect,” he said. A deficit and subsequent spending freeze in Harrisburg also has district officials worried. Last month, state revenues fell to $565 million below expectations, and Gov. Ed Rendell outlined $311 million in spending cuts. As part of those cuts, the state Department of Education froze about one-half percent of its budget, said Leah Harris, department spokeswoman. Matyas and Reinhart both voiced concerns that the state’s budget woes would lead to lagging subsidy payments. “They’ve done it in the past,” Reinhart said. However, Harris dismissed the business managers’ concerns.
“The schedule of payment has not been affected as of right now,” she said. “We don’t anticipate that there will be a delay.”
In many ways, school districts’ financial strains mirror the situation at private-sector businesses across the state and country.
The difference is that public schools have fewer avenues for cutting expenses.
“We can’t reduce staff because our student population is not declining,” said Matyas of Central Bucks. “That’s the problem we have as a public entity.”
Instead, Hatboro-Horsham’s Reichert said, schools must become creative and “focus on doing more with less.”
For districts like Bensalem, that translates to delaying the replacement of furniture and equipment and implementing cost-effective energy strategies, such as the geothermal heating system installed at the newly renovated Snyder Middle School, Myers said.
That was James Carville's famous strategy in the Clinton campaign of 1992. I doubt there's anyone out there who is NOT concerned about the economy and the impact on the bottom line. "Today’s economy will affect the preparation of school budgets as far ahead as 2012 and 2013, he added." Perhaps so, but let's be a little more focused on the immediate: What's the state of revenues and expenditures in 2008-09?
Economy has schools concerned
A lag in tax collections and underperforming investments means schools might need to do more with less in the coming years or find support for a tax increase.
By THERESA HEGEL
Like the families that help to support them, school districts in the area have entered a period of belt tightening.
District business managers already dealing with drops in tax revenue and dwindling investment returns say the budget for the next school year likely will be difficult to prepare.
But most districts said administration and school boards were committed to keeping property tax millage increases at or under the 4.1 percent mandated by the state.
“The whole community is suffering,” said Pennridge Superintendent Robert Kish, noting that his district wasn’t interested in adding to the burden.
Real estate transfer taxes and interim real estate taxes — levied when properties are bought and sold or when improvements are made to an existing property — are, in many cases, down from last year’s levels.
“Homes aren’t selling,” said Robert Reichert, director of business affairs for Hatboro-Horsham School District. “People aren’t doing renovation work like they were.”
In terms of real estate transfer taxes, Pennridge received 81 percent of the level of revenue this July, August and September, when compared with last year’s intake in those months, said business administrator Bob Reinhart.
Last year’s transfer tax total of $1.6 million already represented a dip from years when the housing market was hot. Back in 2005-06, the district reaped $2.1 million from transfer taxes, he said.
So far this school year, the district is receiving 54 percent of the interim taxes it received last year, Reinhart said.
“If [the housing market slump] deepens, the issues are going to get worse than they are today,” he said.
Today’s economy will affect the preparation of school budgets as far ahead as 2012 and 2013, he added.
Bensalem School District built lower revenues into its budget, including a 30 percent decline in interim taxes and a 25 percent drop in transfer taxes.
“I’m pleased that we did take a conservative stance with respect to projected revenues,” said Jack Myers, Bensalem’s director of business operations.
By September, Bensalem had already collected $300,000 of its budgeted $1 million in transfer taxes, which Myers called a “pleasant surprise.”
Still, being on target is more a reflection of the district’s downward projections, and there are still eight months left in the fiscal year, he said.
“At this point, I’m not panicking, but I’m worried,” added Myers, who said he is constantly monitoring and “fine-tuning” the budget.
Central Bucks business manager Dave Matyas was also concerned about the 1 percent earned income tax going south if unemployment levels rise and workers don’t receive raises or bonuses because of the economy.
“Who knows where that’s going to go?” he wondered.
An unstable stock market and cuts in federal interest rates have taken their toll on districts’ coffers.
In its current budget, Bensalem assumed a 40 percent drop in interest returns for the year, Myers said.
Reichert said Hatboro-Horsham, which invests conservatively, has seen its returns cut almost in half from last year. “That’s having an effect,” he said. A deficit and subsequent spending freeze in Harrisburg also has district officials worried. Last month, state revenues fell to $565 million below expectations, and Gov. Ed Rendell outlined $311 million in spending cuts. As part of those cuts, the state Department of Education froze about one-half percent of its budget, said Leah Harris, department spokeswoman. Matyas and Reinhart both voiced concerns that the state’s budget woes would lead to lagging subsidy payments. “They’ve done it in the past,” Reinhart said. However, Harris dismissed the business managers’ concerns.
“The schedule of payment has not been affected as of right now,” she said. “We don’t anticipate that there will be a delay.”
In many ways, school districts’ financial strains mirror the situation at private-sector businesses across the state and country.
The difference is that public schools have fewer avenues for cutting expenses.
“We can’t reduce staff because our student population is not declining,” said Matyas of Central Bucks. “That’s the problem we have as a public entity.”
Instead, Hatboro-Horsham’s Reichert said, schools must become creative and “focus on doing more with less.”
For districts like Bensalem, that translates to delaying the replacement of furniture and equipment and implementing cost-effective energy strategies, such as the geothermal heating system installed at the newly renovated Snyder Middle School, Myers said.
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