Although some officials feel budget deficit numbers to be grossly exaggerated, Palmerton Area School District finds itself faced with an 8.55-percent increase in next year's property tax rate.
The school board unanimously agreed on Tuesday to approve the 2012-13 preliminary budget with a 4.2 mill-increase in an effort to present a balanced spending plan.
If the board were to approve a budget with a 4.2-mill increase, that would raise the millage rate from 49.14 to 53.34 mills. That would mean a person with a home valued at $100,000 and assessed at $50,000 would pay $2,667, or $210 more in property taxes to the district next year. However, that amount would be reduced by the gaming revenue, of which the district won't know until later this fiscal year.
The district has applied for potential exceptions it may qualify for, such as debt service, retirement contributions and special education.
The board's decision to grant preliminary approval to the $27,817,801 spending plan came after it heard a budget presentation from Donna Les, interim business manager.
Much as she did last month, Les cautioned that the millage rate had to be artificially inflated in order to provide a balanced budget document, and that it doesn't reflect the actual millage impact. The most the board could raise taxes is by 1.98 mills, she said.
Les said the district could see an impact in several major categories: medical insurance rate, $290,446; retirement rate, $348,800; Special Education placements, $244,914; IU Transportation (the 2011-12 budget was too low) $141,788; CCTI, $159,244; supplies, $140,322; books, $44,846; and budget reserve, $70,000.
"For the most part, the preliminary budget process is an effort almost in futility because of so many things we don't know," Les said. "What you have before you is truly a worse case scenario; I don't want you to think what you have before you is what you will see on June 30."
Les reiterated to the new board that current assumptions are that the district will see a 6-percent increase in its medical insurance; potentially up to a 12.36-percent increase in its retirement contribution; a 2-percent increase in the Carbon Career & Technical Institute; a $244,900 increase in Special Education placements; and the potential elimination of wrestling, cross country, golf and tennis from the athletic budget.
Other assumptions Les again discussed include a millage rate budgeted adjusted index increase of 2.3-percent, or 1.13-additional mills; as well as state revenue, budgeted zero-percent increase with Accountability Block Grant included.
In addition, Les said next year's budget would use $272,486 from its fund balance due to the reinstatement of staff furloughed in the 2011-12 school year. Next year's preliminary budget revenue is projected at $26,672,018, with expenditures at $27,817,801, which leaves an $873,299 shortfall, Les said.
Among the unknowns Les reiterated were whether the district will get a 2-percent increase in state funding, which if received, would result in $143,025 in additional revenue for Basic and Special Education; whether Accountability Block Grant money will be included in the state budget; and what the exception filing will look like, as it was substantially changed with the passage of the 2011-12 state budget, and preliminary calculations cannot be done at this point in time.
Other unknowns indicated by Les are the amount of the Carbon Career & Technical Institute and Lehigh Carbon Community College budgets, which has left the district to work with only guesstimates; how much the taxable assessment will change; medical insurance renewal information, which, depending upon the district's trust fund balance, could result in a smaller increase that could reflect a potential budget reduction of anywhere from zero to $179,383; and the actual retirement rate, which may be different from the published estimated rate.
"For the most part, everyone did a really, really good job with their budgets," she said. "You are not in the same shape as you were in 2011-12."
Afterward, Superintendent Carol Boyce announced that she has put a freeze on spending on everything except for emergencies and ongoing expenditures, effective Dec. 31.
"Written justification must be submitted with a purchase order request," Boyce said. "This is something we do every year."
Les said the district will continue to work to gather additional information to refine planned expenditures for the 2012-13 fiscal year in order to minimize the impact to the taxpayers. The final budget for 2012-13 must be approved by June 30, 2012, she said.
This year, residents saw a 12.6-percent increase in their property tax rates after the board, on a 5-4 vote in June, adopted a $26,595,297 spending plan for the 2011-12 school year that called for a 5.506-mill increase.
The 2011-12 budget raised the millage rate from 43.64 to 49.14 mills, and meant a person with a home valued at $100,000 that was assessed at $50,000 had to pay $2,457, or $277 more in property taxes to the district.