By Mark D. Marotta
21st Century Media
PERKIOMEN—The Perkiomen Valley School District tax rate is going up by 1.78 percent under its 2013-14 budget.
The school board approved the final general fund budget in a 7-1 vote Monday night, following a presentation by Jim Weaver, the district’s business administrator. Board member Gerry Barnefiher voted against the budget, and John King had left the meeting earlier.
According to the information provided by Weaver, the district would be increasing its tax rate by 0.52 mills, to 29.76 mills. A residence at the district’s average assessed value of $180,000 would have a $5,356.62 tax bill in 2013-14, up $93.42 from the current year’s $5,263.20.
Weaver’s presentation projected a total of $91.37 million in projected revenues for 2013-14, up $2.17 million, or 2.43 percent, over the current budget. However, district expenditures would rise by 3.58 percent, to $93.44 million, leaving a gross shortfall of $2.07 million in 2013-14. The district will draw $1 million from its fund balance to help close that gap, and Weaver explained that the property tax increase was calculated to cover the remaining “net shortfall.”
His presentation indicated that, had it not been for its earned income tax and the state subsidy for the Pennsylvania School Employees’ Retirement System (PSERS), the district was projected to have a $353,873 reduction in revenue in 2013-14. That was “something to be concerned about,” Weaver said.
Among other things, he told the board out that the budget would not assume any money would be coming to district from Pennsylvania in lieu of taxes on homes in Evansburg State Park. Information that Weaver provided to the board in May indicated that the district stood to lose $305,000 in state revenue because the number of homes in the park had dropped below a minimum of 75 that previous legislation had set in order for money to come to the district.
Another point of uncertainty, Weaver added, was that “basically, we don’t know where the state budget is.” In general, he said, it was projected that $19.02 million in revenue would come to the district from the state, up 6.29 percent over 2012-13. However, the majority of that growth was attributable to the increase in the PSERS subsidy, he said.
With the employer contribution rate to the retirement system rising from the current level of 12.36 percent to 16.93 percent, the increased cost to the district would be nearly $2.4 million in 2013-14, according to Weaver. Presuming no salary increases, he added, Perkiomen Valley’s contributions into PSERS will be going up by $7 million over the nine-year period ending in 2021-22, which was “something to be on the lookout for.”
Board member Paul Smith commented that would amount to a projected 250-percent increase in the cost to the district.
A pie chart included in Weaver’s presentation indicated that salaries and benefits constituted 67.29 percent of the budget’s projected expenditures. Salaries were anticipated to amount to $43.32 million, while an additional $19.56 million would be spent on benefits. Weaver pointed out that the budget included two new employment positions in technology and special education.
As for revenues, Weaver said the revenue from the earned income tax “has been fairly steady” and was projected at $10.8 million in 2013-14. He also described the district’s interest earnings as “very low.”
Weaver reported that an additional $63,146 would be generated by increased real estate assessments since his last budget presentation in May.
“How does the assessment grow?” asked board President Lori Snyder. “What does it mean?”
Any time a new house or addition was built, the property assessment went up, Weaver said, adding that there recently had been “some growth.”
While Weaver said he was “comfortable” with the recommendation of drawing $1 million from the fund balance, he noted that “it’s one-time money.” A healthy fund balance, he added, helped with refinancing bonds by avoiding the need for insurance.
Barnefiher said that, as the process to develop the budget had progressed, the projected tax increase for the coming year had been reduced. He added that he leaned in the direction of using less of the fund balance.
Snyder said she was “more and more concerned” with having the overall fund balance decline. She pointed out that the fund balance was the only place the district could go to cover unanticipated needs.
Randy Bennett made the motion to approve the budget, and Smith seconded it. Speaking after the meeting, Barnefiher confirmed that his vote reflected his concerns about the use of the general fund.