The Perkiomen Valley School District Board of Directors approved a proposed final budget for the 2013-14 school year at the May 6th work session, a spending plan that at this point has closed the budget gap that existed between revenues and expenditures and includes a tax increase that is below the state-mandated Act 1 index of 2 percent.
The Board and administration still have approximately a month to continue to fine-tune the numbers before final budget adoption in June, but through expenditure reductions and additional sources of revenue, the deficit that was as high as $5 million in December has been significantly reduced. Some of the more recent adjustments made include:
· An administrative wage freeze, which was approved May 6 and reduced expenditures by $72,988
· Seven full-time teaching positions that will be reduced through attrition, $603,848
· The removal of a proposed new special education teaching position, $79,221
· The removal of a proposed new technology teacher-on-special-assignment (TOSA) position, $79,221
These changes resulted in a reduction of $835,278 from the expenditure side of the budget. The district also conducted two very successful refunding opportunities on current bond issues and saved approximately $1.3 million dollars to be spread over several fiscal years.
On the revenue side, the proposed final budget reflects a large increase due to two main factors – earned income tax collections and state revenue for anticipated retirement rate hikes. Earned income tax collections continue to outpace budgeted figures – the district is anticipating a $1,150,000 increase for the coming budget year. The district will be receiving increased state revenue as a result of the proposed hike in employer contributions to the Pennsylvania School Employees Retirement System (PSERS). While the district will be paying out more for this benefit in the coming year, it also receives reimbursement from the state for this cost, resulting in an increase on the revenue side of $1.4 million.
Another change on the revenue side includes a potential reduction in real estate taxes due to changes related to rental properties in Evansburg State Park. While the state does not normally pay real estate taxes to school districts for properties it owns, under a law fought for by Perkiomen Valley and Methacton School Districts, the state was obligated to real estate taxes for rental properties located in Evansburg where students were living. A provision of this law indicated that if the number of rental properties fell below 75, the state would no longer have to pay real estate taxes. Because some of the homes are now being demolished, the state is declining to pay $305,000 for the remaining rental properties. The district has been working with state legislators to address this.
The district is also facing dramatic increases in its required contribution to PSERS. Next year, the rate will rise from 12.36 percent to 16.93 percent for a total dollar impact of more than $2.3 million. Mr. Weaver noted that the numbers do not get any better moving forward. The employer contribution rate is projected to climb for the next eight years, resulting in millions in increases before any other budgetary adjustments are made. While Gov. Tom Corbett has proposed capping contribution rate increases, it is not certain at this point whether or not that will happen. Perkiomen Valley continues to plan for the anticipated increases.
Other budgetary increases include charter school tuition ($300,000) and increases in existing contracts for transportation ($229,000). Overall expenditures increased by 3.61 percent, or about $3.26 million. Most of the district’s contracts were negotiated by administration to show no increase or to be held at the Perkiomen Valley Act 1 Index of 2.0%.
There are still many unknowns that must be worked out between now and June and more adjustments are likely to occur prior to final budget adoption in June. The proposed final budget calls for closing the remaining $1,155,470 deficit by using $1 million from the fund balance and raising property taxes by 1.92 percent (which is below the Act 1 index of 2 percent). A 1.92-percent tax increase would result in an annual increase of approximately $101 for a homeowner with an average assessment of $180,000.
|Important Dates in the 2013-2014 Budget Process|
|Date||Meeting||Topic||Click on Link to View Presentation|
|November 12, 2012||School Board Meeting||Review of 2013-14 revenues||Presentation|
|November 12, 2012||School Board Meeting||Three-Year General Fund Budget Projection||Presentation|
|December 10, 2012||School Board Meeting||Review of 2013-14 expenditures||Presentation|
|January 14, 2013||School Board Meeting||Brief Budget Update||Summary|
|February 11, 2013||School Board Meeting||Budget presentation and Board votes to adopt proposed preliminary budget||Presentation|
|April 8, 2013||School Board Meeting||Budget presentation||Presentation|
|May 6, 2013||School Board Work Session||Budget presentation and Board votes to adopt proposed final budget||Presentation|
Additional Budget Information:
- District Saves More than $112,000 Through Consortium
- District Refinances More Bonds to Save Over $1M
- District Refinances Bonds to Save Over $1M
- PASBO budget timeline
- District Saves Over $600,000 Through Refinancing of Bonds
- District Commended by Secretary of Education Following Audits
- Independent Auditor's Report for the 2010-11 School Year
- 2012-13 Budget Information
- 2011-12 Budget Information
- 2010-2011 Budget Information
- 2010-2011 Budget Expense Information
- 2009-2010 Budget Information
- Budget Frequently Asked Questions (FAQs)