School Budget Update: Board Still Working on Cuts, Revenue Growth

The budget process continues at Phoenixville Area School District, and for now, the preliminary numbers show a proposed tax increase of approximately 3.8 percent.

The school board met on Feb. 21 for a budget meeting and the following changes were noted in the presentation.

Raising the Occupational Assessment Tax: $20,910 in Revenue

The administration recommends raising this up the allowable 1.7 percent. This will raise $20,910 in additional revenue.

Under Act 1, districts are limited on how much they can raise taxes. The index for Phoenixville Area School District is 1.7 percent for the 2012-2013 school year.

In total, the tax raises approximately $1.25 million for the district.

This tax hits the working people, and doesn’t affect those without jobs or seniors who may be living off of other forms of income.

“If you don’t have an occupation, you don’t pay the tax,” Board Treasurer Josh Gould said.

The district raised the occupational tax last year by the maximum percentage allowed, as well. 

$200k Returned to Transportation Budget

At a budget meeting earlier in the year, Stan Johnson, executive director of operations, said he’d likely be able to find $200,000 more in savings in the budget by evaluating the need for bus aides, possibly looking into increasing walking distances to the Pennsylvania Department of Education maximums and other options.

That $200,000 was not factored in at the , but was accounted for by the Feb. 21 meeting. The reduction would bring the total 2012-2013 transportation budget down to $3.5 million.

Increased Staffing for CAT Pickering Enrollment Changes at $200,000

Approximately 40 to 50 students who would have attended the Center for Arts and Technology-Pickering campus in ninth-grade will now wait for tenth grade to head to that school.

According to Superintendent Dr. Alan Fegley, besides Phoenixville and Owen J. Roberts, all other schools participating in the Chester County Intermediate Unit wait until tenth grade to send students to technical, career and academic courses at the career and technical education centers within the IU. Next school year, Phoenixville will make the change and have students enroll at CAT Pickering in tenth grade.

This will cost approximately $200,000 for additional staffing needs at the high school, but Fegley said that the district will also see savings somewhere near $300,000 for the costs associated with sending students to the CCIU in ninth grade. Those savings were already booked into the 2012-2013 revenue items prior to the Feb. 21 meeting.

State Revenue to Potentially Increase by $113,964

Fegley said this is increase is tentative as Gov. Tom Corbett’s proposed budget is still going through the approval process.

However, early numbers show that the district will get $137,000 more in state funding compared to the 2011-2012 school year. The preliminary budget included $23,000 in increased state funding, so the extra $113,964 was factored in as revenue for the Feb. 21 budget meeting.

“We’re hopeful that it stays there,” Fegley said, but some jostling of money for public colleges may lead to a reduction in the state revenue that Phoenixville receives.

Anticipated Electric Costs Savings of $50k

The changes from the January budget meeting to the February budget meeting also included a $50,000 change in electric costs in the district.

Thanks to efficiencies and initiatives, the administration believes that the district’s electric costs will be $50,000 lower than what was included in the preliminary budget. The estimate of $50,000 in extra savings was given by the district’s energy consultant.

Assessment Growth Re-evaluated to the Tune of $133,465

Comptroller Chris Gehris said an adjustment was made to the tax assessments in the district between the January and February budget meetings.

Initially, the district was “optimistic,” according to Gehris, and anticipated 0.25 percent growth year over year in tax assessments in the district.

“Since we saw it kind of declining a little, I thought it was better to just take it to zero [percent growth],” Gehris said at the February budget meeting.

The change means the removal of $133,465 in revenue from the 2012-2013 budget.

Debt Service 

The district saw a savings of $1.64 million thanks to refinancing 2005 bond issues. 

Initially, the administration recommended spreading that extra money out and paying more toward debt service in the 2012-2013 school year and seeing bigger savings in the 2013-2014 school year.

The administration reversed course on this, however, so $650,000 in debt service was shifted from the 2013-2014 school year to the upcoming school year.

Total Changes

With all those changes, including the $650,000 in debt service, the district’s tax increase was reduced to 2.59 percent, or $96 for the average assessed home in the district at $133,540. However, that was jostled back to approximately a 3.8 percent increase with a change in the way recent debt service savings would be distributed.

The district saw savings thanks to a refinancing of 2005 debt. The total savings was minimal this year but the district had two options on how to spread out the $1.64 million in savings for the next two years.

As noted above, initially, the recommendation was to pay a bigger sum—$1.8 million—toward debt service for the 2012-2013 school year, rather than lumping in some of the refinancing savings for payments of $1.1 million.

The administration changed the recommendation on this, and that was reflected in the 2.59 percent tax increase earlier in the evening during the February budget meeting.

The board, however, disagreed, saying the district should still make the bigger payment in the 2012-2013 school year.

“It seems like we’re trying to cushion the blow from the future,” Board President Paul Slaninka said.

That moved the $650,000 back into debt service for next school year and inched the tax increase back up to approximately 3.8 percent. To get to a zero percent tax increase for 2012-2013, the district will have to trim $2.055 million or use a combination of revenue and cuts totaling $2.055 million.

Last year, the district increased taxes , struggling with a difficult budget season after seeing cutbacks year over year in state education funding.

The next budget meeting is scheduled for March 20 at 6 p.m. in the district’s administration building.

For a look at upcoming budget meeting topics as well as the presentations from past meetings, visit the Phoenixville Area School District website.