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Opinion: Officials singing school budget blues

There’s not much agreement between Republicans and Democrats in our area, but there is one thing on which they are almost universally united: Just as their constituents do, they love to hate the school real estate tax, which districts are putting into place right now as part of their official budgets for the coming school year.

By the looks of things among some of the districts which have announced budget intentions, this is going to get ugly real fast.

According to state law, the tax rate must be fixed no later than June 30, the end of the fiscal year which runs from July 1. Many districts did not raise rates in 2020 for the 2020-21 school year in deference to the economic and emotional hardships suffered because of the COVID-19 pandemic. Last year, some districts postponed the inevitable increases by using stimulus funds granted by the federal government. This year, this well has run mostly dry for many districts, which are now beating the bushes looking for ways to raise revenue and cut expenses.

There is no question that among the three taxing entities - municipality, county and school - school taxes are by far the greatest, dwarfing in just about every instance the other two combined by many multiples.

Having heard this growing chorus of complaints from their constituents, especially older property-owners who no longer have children in school, politicians have tried to build consensus and do something about this onerous tax.

Just about everyone who has gone down this path has found that the road to undo this hellish tax is paved with good intentions but, so far, no real solutions are forthcoming, and the devil always seems to be in the details.

It reminds me of the old saying about the weather: “Everybody talks about it, but nobody does anything about it.”

It’s not as if some advocates are not trying. State Sens. David Argall, R-Schuylkill, and Mario Scavello, R-Northampton and Monroe, are two of the leading proponents to eliminate or modify the school tax, but, so far, neither has been able to rally a coalition of their colleagues to pull the trigger.

Scavello is not seeking re-election this year, so his fiery voice on behalf of tax reform will be missing from the debate when the new General Assembly takes office in December.

Eliminating or reducing the real estate tax is tricky business, because since it makes up the lion’s share of a district’s revenue, the lost money will have to come from someplace else, most likely by increasing the state income tax.

Among districts which have posted preliminary budgets, Tamaqua is proposing a 1.5% increase in real estate taxes while Northern Lehigh is facing a 4.6% hike, near the state limit for one year without seeking voter approval. The Jim Thorpe board rejected a budget proposal that calls for a 4% tax hike to deal with a $5.3 million deficit. Officials from these districts stress that their goal is to shave proposed tax increases and reduce costs before final budget adoption next month.

No district wants to try to raise taxes beyond the state limit, which would trigger a referendum, because you don’t have to be a genius to understand that the public will almost always shoot down tax increases, regardless of how gloomily districts paint the situation.

No district is in more dire straits than Pleasant Valley. During the last decade, the student population has dwindled by almost 30%, from 5,436 to 3,792. Part of this loss has been to decreased population, charter schools and parents who have decided to home-school their children. Some of my sources tell me that the chaos that has been going on in the district during the decade has caused parents to rethink where they want their children educated.

As a result of the drop in the number of students, the Pleasant Valley School Board at its last meeting approved laying off 52 employees - 18 professionals and 34 support staff. This would come on top of previous layoffs.

Even with these draconian cuts, the district, which is made up of Chestnuthill, Eldred, Polk and Ross townships, is facing a deficit of about $4 million, maybe even more, which will require a 4.7% real estate tax hike and transferring money from its rainy day fund.

When Business Manager Michael Simonetta apologized earlier in the year for the “doom and gloom” report, he said as grim as the outlook is he wanted to be upfront with the community.

With inflation running at a four-decade high, you can bet that just about anything these districts will be buying or services contracted will cost more in the coming year, and for officials to try to project how much higher these basic costs will be is like throwing a dart at a board while blindfolded. “Best guess” will be the order of the day.

By Bruce Frassinelli | tneditor@tnonline.com

The foregoing opinions do not necessarily reflect the views of the Editorial Board or Times News LLC.