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12.6% budget hike proposal has board back to the drawing board

Published March 17. 2011 05:00PM

A proposed 12.6-percent increase in next year's budget has sent Palmerton Area School District back to the drawing board.

The school board's Budget and Finance Committee will meet at 5:30 p.m. Tuesday to once again hone in on the 2011-12 preliminary budget.

Superintendent Carol Boyce said the purpose of the budget meeting is to "have the administrative team, who helped to develop that budget and need to implement that budget, meeting with the policy-makers who establish and adopt the budget so that we're sure we're all on the same page."

"Both groups have specific responsibilities in a budget process, and it's important that we work together as a team so that we have the best balance we possibly can have between the educational needs of the students and the capacity of the community to afford it," Boyce said. "We're working together, which is absolutely crucial."

Boyce said "both groups have needs that I hope will be very, very clear through this process."

"The board needs to know the impact of the cost of the programs, and the administration needs to know what the board feels is the capacity of the community," she said. "So each group should bring its own area of expertise and responsibility to that meeting."

Boyce said the meeting is an "informational sharing; each group needs the other to get a clearer picture."

"Because the board has the legislative responsibility, so to speak, they need to share with us the bottom line, what figure, what millage, what are the financial limits within which we need to produce or provide the educational program," she said. "The administration's responsibility is to share with the board that if certain cuts needs to be made and certain programs need to be reduced or eliminated, what is the educational impact of those numbers."

Then, on Tuesday, March 29, Boyce, along with members of the board, will attend a budget summit conducted by its Intermediate Unit.

"Boards and superintendents and IU personnel will be meeting to share possibilities, creative ways, additional sharing, ways to meet the fiscal crisis that we all face," she said. "We already do a lot of collaboration, but we're always very open to somebody's ideas or suggestions that maybe we haven't thought of or to maybe work together."

Part-time interim acting business manager Donna Les told the school board at a committee workshop earlier this month that about $10,000 had been shaved off the district's preliminary budget.

Les said the cuts would reduce the proposed spending plan from $27,388,817 to $27,378,655 due to medical insurance budgeted costs ($244,116); an athletic fund transfer ($133,545); and an increase in the IU Special Education Contract ($130,086).

Other areas that were affected were a new technology position ($67,018); add impact of support staff contract ($58,918) cut new part-time secretary ($27,387); and cut facilities vehicle ($21,700).

Last month, the board, on a 5-4 vote, agreed to adopt the $27,388,661 preliminary budget that calls for a 12.6-percent, or 5.5-mill increase that would raise the millage rate from 43.64 to 49.14 mills.

That would mean a person with a home valued at $100,000 and assessed at $50,000 would pay $2,455, or about $275 more in property taxes to the district next year.

In the event the board were to adopt next year's budget with a 5.5-mill increase as currently presented, Les said that would mean no program cuts would be required.

Should the board approve a budget with a 5-mill increase, that would require program cuts of $144,304; a 4-mill increase, $429,489; a 3-mill increase, $714,674; a 2-mill increase, $999,589; and a 1-mill increase, $1,285,044, she said.

In January, Les reworked next year's spending plan in order to avoid an additional 2.72-mill increase on top of a 3.56-mill, or 8.15 percent, increase in the 2011-12 preliminary budget the board agreed to advertise for adoption in January.

Otherwise, that would have increased the millage rate from 43.64 to 47.20 mills, which would have meant a person with a home valued at $100,000 and assessed at $50,000 would have paid $2,360, or about $180 more in property taxes next year.

Les told the board at that time that of the $1.7 million the district had in its fund balance, only $730,000 remains after the other $923,000 was used to balance the current year's budget.

The amount of money the district budgeted for its share of the 2011-12 Carbon Career & Technical Institute budget was understated by about $351,060, Les said at that time. Also, the loss of $426,051 in federal program money would have required an additional 2.72-mill increase in the district's preliminary budget, she said.

Les said revisions to next year's preliminary budget increased expenditures $555,498, from $26.8 million to $27.3 million, which represents a 1.95-mill increase over the initial preliminary budget.

Boyce acknowledged at that time that a reconciliation of billing showed that the district has "been significantly under budgeting for the last several years." Les said the reconciliation was completed in November.

However, Les cautioned that the preliminary budget is only a rough draft, and therefore could be modified between now and final adoption due by June 30.

Boyce said at that time she and Les "will be talking with every building administrator" in an effort to re-evaluate their respective spending plans.

In December, the committee met with each of the district's department heads as part of a pair of meetings in its attempt to craft next year's spending plan.

As required by Act 1 of 2006, the board intends to seek approval from the Pennsylvania Department of Education, or the Carbon County Court, for all referendum exceptions for which the district qualifies.

Les told the committee there were several referendum exceptions the district qualified for: special education, retirement contributions, and maintenance of local revenues.

This year, homeowners saw a 3.9 percent, or 1.64-mill increase, in their property tax rates after the board in June approved the 2010-11 budget on a 5-4 vote that raised the millage rate from 42 to 43.64 mills.

That meant a person with a home valued at $100,000, which was assessed at $50,000, paid $2,182 in property taxes to the district, $82 more than the $2,100 rate they paid in 2009-10 when the board passed a budget with a 2.44 percent, or 1 mill, increase that resulted in a $50 increase for residents with the same home value.

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