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Hold line on school taxes this year

Officials at some school districts throughout Pennsylvania are going back to the drawing board to figure out how to reconstruct 2020-21 budgets that have been blown out of the water by the COVID-19 pandemic.

At the top of the list is whether students can return safely to classrooms in the fall or whether distance learning will continue into 2021. No one really knows the answer.

The state requires school districts to have their budgets in place by June 30, the end of the fiscal year. Some say a budget is a blueprint for the next 12 months; this year, however, it will be a treasure hunt for revenues to keep districts afloat. For those districts able to do it, they will be transferring money from their “rainy day” funds. This isn’t a rainy day; this is a deluge, a hundred-year flood.

The pain will be palpable, not only at the school district level but at every level of government. None will come out of the pandemic unscathed. Pennsylvania, for example, is facing a $4 billion deficit as legislators also face a June 30 deadline for next year’s budget.

Despite this, in his state budget proposal for 2020-21, Gov. Tom Wolf is holding on to his efforts to grant education a small increase over this year’s funding. Most legislators, especially Republicans, find this to be a fanciful pipe dream.

The Pennsylvania School Boards Association, which represents the state’s 4,500 locally elected board members, is urging its members to contact their members of Congress to lobby for federal help over and above the money districts got from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Local officials are urging residents to contact their state legislators not to decrease funding for cities, boroughs, townships and counties.

Pennsylvania schools face a breathtaking shortfall - some are predicting $4 billion this year alone. School districts are looking at a revenue drop of $1 billion or more, as staggering unemployment surpasses 2 million, which will result in a hit to 1% earned income tax receipts, which are usually shared with constituent municipalities.

In addition, real estate activity, which until days ago was considered a “nonessential” business, has stagnated during the health crisis, meaning that revenue from the 1% real estate transfer tax, also shared with municipalities, will have dried up. And, of course, the big one - property taxes. Look for many unemployed Pennsylvania property-owners to be unable to come up with this payment right away. Some districts are looking to cut them an extension break. These tax payments are generally not due until late summer or during the fall, after school districts finalize their budgets at the end of June.

A growing chorus of legislators and residents from around our area are clamoring for districts to hold the line on taxes because of the personal economic toll that the pandemic is taking on families and businesses. Some even hope against hope that the taxes could be reduced a little as an acknowledgment of the economic hardship. In other words, give us a sign that you understand our plight.

They said that districts are saving thousands because buses aren’t running, school facilities are largely shuttered, many part-time employees are off the clock, along with other savings.

“This is a myth,” said Andrew Christ and John Callahan of the school boards association. They said under Act 13, all educators and many other employers continue to draw salaries. In addition, other services are being provided during the pandemic, and new costs are being incurred, including computers for distance learning classes, upgrading central computer systems and feeding students.

They also said a property tax freeze for next school year would be “detrimental” to some poverty-stricken school districts, some of which are in the five-county Times News region. This makes no sense, they said, to layer this in on top of growing expenses from mandated programs such as pensions, charter school tuition and special education needs.

Maybe so, but you can’t get blood from a rock, and many of our residents have no more blood to give when it comes to making ends meet.

It can’t be business as usual this year. Board members, many of whom are business people and employees within their districts, are painfully aware of the economic realities of the moment and need to resist calls for higher taxes.

Despite this, some districts have already approved final or tentative budgets calling for tax increases. They include Palmerton, Panther Valley, Northern Lehigh and Pleasant Valley.

I am just as incredulous as Northern Lehigh board member Robert Keegan Jr., the only “no” vote on the budget proposal in his district, when he said he can’t for the life of him see how his eight colleagues can justify raising taxes with the damage the pandemic has already exacted on district residents.

By Bruce Frassinelli | tneditor@tnonline.com