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By LAKESHIA KNARR
BELLEFONTE – There is still a lot to consider, but the Bellefonte Area School Board may need significantly more local and state revenue to balance its budget next year.
Those were the sentiments of Ken Bean, district fiscal director, as he gave the board a quick snapshot of a the preliminary budget for 2015-16.
Total revenue, he said, comes in at about $45,425,000, with expenses totalling about $48,150,000, which would require $2,725,000 from the fund balance to break even.
That would leave about $3.3 million in the fund balance, or 7 percent of the district’s expenses, as per board policy, Bean said.
A property tax increase of 4.8 percent would be required to stay out of the red, he said, noting that figure effectively doubles the taxation limit set by the state Department of Education for the district (2.4 percent.)
“This is just where we are right now. Hopefully this will keep coming down,” Bean said. “We are working on bringing this down. Some of these numbers … it’s too early to tell … I’d prefer to estimate high at this point than to do the opposite.”
Bean said the district must find an additional $512,502 to get down to a 2.4 percent tax increase. This snapshot of the budget does not include PDE-approved exceptions of $367,356, he said.
The district uses an assessment formula of about 50 percent of a property’s market value for taxing. For a property assessed at $49,773 – just about the average – a 4.8 percent increase equates to $114 more, Bean said.
As far as the revenue side of the budget, Bean pointed out a few things driving it.
r The budget accounts for $223,866 in property value growth, he said.
“This is one of the lowest percentage gains (in property value growth) I’ve seen in 15 years. We are at .35 (of 1 percent) increase of assessments added to the rolls. I’m budgeting .75 (of 1 percent,) which is the lowest I’ve ever budgeted. But it doesn’t look like we’re going to get there, so I’m going to have to adjust this down to probably about .5 (of 1 percent),” he said.
r He said the budget accounts for an additional $150,000 from earned income taxes.
r The budget also shows a 2-percent increase for the state basic education subsidy right now, representing $159,000 more, Bean said.
“The special education subsidy is budgeted flat right now. Although I do feel we will get something … It’s just impossible to even guess right now what that might be,” he noted.
r Bean also said that federal grants to the district are down $40,000.
On the expense side, Bean said the three key areas contributing to the increase are higher salaries (totaling $18.6 million in the proposal), increased benefit costs, debt payments and charter tuition.
“Over 68 percent of the increase in the coming year is in salaries and benefits,” he said.
Bean said the proposed budget shows an additional $487,000 for salaries, but the board is negotiating two union contracts and the figures are “guestimates.”
“We may have to lower what we can do there to make up that $500,000 that we’re short right now,” Bean said, referring to the additional money needed to lower the tax increase to 2.4 percent.
Other items of note on the expense side:
r The newly certified 2015-16 Pennsylvania School Employees’ Retirement System (PSERS) contribution rate of 25.48 percent (up over 4 percent) equates to nearly $1 million in additional expenses, Bean said.
r There is an increase of about $100,000 toward the charter school tuition payments for a total of about $2 million. That doesn’t count transportation costs, he said.
r “We have cut over $100,000 in curriculum, both in books and supplies. We’ve cut some educational consultants.”
Overall, he said, expenses totaling $48 million are proposed, up 4.2 percent from 2014-15.
Bean was sure to remind the board there is still a lot to keep in mind going forward, including state funding, contract negotiations, staffing decisions, maintenance and health insurance costs.
“We still need to consider the state budget,” he said. “At this stage of the game, I’m really not sure where we’re going to be with the state budget. We can look at budgeting some additional funds there if the board feels strongly inclined that way.”
He said the current budget does not account for additional positions.
Currently, the budget allots $250,000 for deferred maintenance toward normal repairs and there is an additional $250,000 for Rogers Stadium or other athletic facilities.
As far as health insurance goes, Bean said, “I’m still confident we can hold our rate.” The district has budgeted about $6.5 million, he said.
“I know there is a time bomb waiting for us with the American Affordable Care Act … the tax on the Cadillac plan. Have you anticipated that and do you have any idea what it may look like?” asked board member Chip Aikens.
“The tax is … I want to say 40 percent (of the benefits package) and it goes into place, I believe, in 2018,” Bean said. “We’re going to be close. I think we’re going to be okay, but we’re going to have to monitor that closely.”
“Yeah, we’re going to have to start planning for that because, unless it’s repealed, it’s going to be a certainty,” Aikens said.
If their plan is deemed a “Cadillac plan,” they will be penalized for it, he added. “If that number gets too high,” Bean noted.
The board is expected to discuss the budget further at its May 5 work session. A budget vote is expected at its May 19 meeting. The proposed budget will be on public display until adoption, expected on June 23.
In this current year, the board did not raise local property taxes after initially voting to do so.