POTTSTOWN >> For the second year in a row, the Pottstown School Board is poised to adopt a budget that will not raise taxes.

The news came just two days after the neighboring Pottsgrove School Board voted for a zero tax hike budget as well.

Business Manager Linda Adams delivered the good news for Pottstown taxpayers Thursday at a meeting of the school board’s finance committee.

She said the primary reason for the zero tax hike is a 12 percent drop in health insurance costs — worth more than $1 million — that are a result of the district “self-insuring” through a regional cooperative rather than traditional private health insurance.

Human Resources Director Stephen Rodriguez said that for the last five years, health insurance costs in Pottstown have been level or declining.

The news is a “welcome change” from the budget review last month during which Adams said a 3.4 percent tax hike might be necessary to close a $155,696 budget gap.

But the $59,553,150 budget draft Adams unveiled Thursday night — which increases spending by $2.4 million — calls for closing the $130,519 budget gap with some of the $500,000 contingency fund included in the budget every year.

Adams recommended, and the finance committee enthusiastically agreed, that using rarely tapped contingency fund money was better than the .46 percent tax hike presented as the other option.

Also helping the tentative bottom line is $1,184,626 more in state revenues for basic education, PreK Counts, transportation and a $75,000 innovation grant coming to Pottstown, one of only two school districts in the state.

That figure was reached despite respective drops of $65,147 for special education funding and $70,307 for vocational education.

Another roughly $1 million in state aid for pensions matches the roughly $1 million more the school district must provide for the pension program, PSERS.

One big hit to the budget is the dropping cumulative assessed value of Pottstown real estate.

Total assessed Pottstown property value dropped by $5.5 million in just one year, resulting in a loss of nearly $400,000 in tax revenue that had to be made up somewhere.

That somewhere was increases in earned income and delinquent tax collections, which brought the total local tax revenue shortfall to $172,510.

According to the Letter of Transmittal that Adams will present to the full school board at the May 19 meeting, salaries and benefits comprise more than 65 percent of the budget costs.

The total increase in the salaries and benefits line of the proposed final budget is $595,582, or 1.4 percent.

Charter school tuition, and in particular, cyber-charter school tuition, was another hurdle for a balanced budget, said Adams.

The 2015-2016 budget was built with the assumption that state plans to fix the formula for cyber charter schools — which several board members called “a scheme” — would save the district $712,280 in the current budget year, but that didn’t happen.

That, plus an increase in all tuitions at charter and special education facilities, contributed to a $1.3 million hike in the budget’s tuition line for 2016-2017, said Adams.

State law requires the board to adopt a preliminary final budget in May for public inspection. That will likely occur at the school board’s May 23 voting meeting.

The final budget must be adopted by the end of June.

That is also the deadline for the state to adopt a budget — a deadline Harrisburg missed by a record nine months for the current fiscal year.

It remains unknown how talks on the 2016-2017 fiscal year budget are progressing.

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