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Budget Frequently Asked Questions (FAQs)

Where does funding for the Perkiomen Valley School District come from?

Like all 500 school districts in Pennsylvania, the Perkiomen Valley School District receives revenue from three primary sources: local, state, and federal revenues.
 
The individual revenue breakdowns include:
  • local - 80%
  • state - 19%
  • federal - 1%
What factors will affect the 2012-2013 budget?
 
There are many factors that will affect the 2012-2013 budget, including:
  • Salary increases for staff
  • FICA and PSERS (retirement) cost increases
  • Health insurance increase
  • Special Education increase
  • Charter/Private schools
  • Reduced state subsidies
What is a mill?

A mill is a unit of currency used that is equivalent to 1/1000 of a United States dollar (1/10 of one cent or $.001). A mill levy is the number of dollars a taxpayer must pay for every $1,000 of assessed value. One mill equaled $2,011,000 for the 2008-09 budget and one mill is projected to equal $2,041,500 for the 2011-2012 budget.
 
How are assessments prepared?
 
The state of Pennsylvania has a constitutional requirement for uniformity of taxation. Counties are the governmental unit responsible for assessments. They typically meet the uniformity requirements by adopting a “base year” market value.
 
How does a millage rate and assessment come together in the form of a tax bill?
 
A resident of the Perkiomen Valley School District can calculate their school tax bill by multiplying the millage rate by the assessed value of their home.
 
For example, a property assessed at $150,000 would have received an annual school tax bill in 2008-09 of $3,951 or .02634 (millage) multiplied by 150,000. A house assessed at $200,000 would have received a tax bill in 2008-09 of $5,268.

In comparison, a property assessed at $150,000 would have received an annual school tax bill in 2011-2012 of $4,288 or .02859 (millage) multiplied by 150,000. A house assessed at $200,000 would have received a tax bill in 2011-2012 of $5,718.
 
Who approves the Perkiomen Valley School District’s budget?
 
The Board of School Directors must approve the district’s budget each year before June 30.
 
Why is it so difficult to reduce a school district’s budget? 
 
Educating students is both labor intensive and highly regulated. Employee compensation and benefits accounts for over 64% of the district’s operating budget and the majority of the employees work under collective bargaining agreements that cannot be changed unilaterally. In addition, 11% is directly associated with debt service and 16% is associated with operating costs (costs for operating buildings and building projects).
 
What is a fund balance? Does the Perkiomen Valley School District have one?
 
Fund balance is a measure of net financial assets, which is similar but not identical with equity or accumulated savings. The fund balance is equal to financial assets less financial liabilities. In other words, it is like the balance in your checking account. Deposits are like assets and the bills you need to pay are like your liabilities. What is left over is generally considered your available balance, or what is left for discretionary household spending.
 
It is important to recognize that there is often a portion of the fund balance for a school district that is reserved and can only be used for specific purposes because of legal or accounting commitments. The unreserved portion of the fund balance can be used for any future district spending. Good financial practices suggest that districts maintain an adequate unreserved fund balance to cover district emergencies or other contingencies. The state also mandates an unreserved fund balance less than 8% of projected expenditures.
 
The Perkiomen Valley School District currently has a fund balance of $5,246,452 (or 5.7% of the maximum 8% state mandate). The budget for 2011-2012 included using $1.150 million of the fund balance to help limit the tax increase for residents.
 
How are budget decisions made?
 
Various factors will affect budgetary decisions. Some of these include size of the enrollment; number and educational level of staff; the requirements of collective bargaining agreements; building needs (age, efficiency, and space requirements); pupil transportation costs (including transportation for non-public students); health and special educational programs; and changes in program requirements.
 
On the revenue side, influencing factors include the number of taxpayers; the assessed value of real estate and other tax-generating capacity; practical and legal limits on the rates of taxation; current and future debt; value of investments; various state subsidies and other funding (including building construction reimbursements); and federal and state grants.
 
The budget must develop and bring together all of these factors to provide a coherent plan. Choices need to be made between educational requirements and available funding. There are always competing interests.


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