KC board approves preliminary budget in 5-3 vote; includes first tax increase in three years
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MILL HALL – The Keystone Central School District Board of Directors approved a preliminary 2023-2024 budget, and with it, the first tax increase in three years. The budget was moved ahead in a 5-3 vote.
Eight board members were present at the meeting. School Board Vice President Roger Elling, Jeff Johnston, Butch Knauff, Wayne Koch and Tracy Smith all voted in favor of the budget.
Board President David Dietrich, Elisabeth Lynch and Frederick “Rick” Schulze were the three remaining members who voted against the proposed budget increase. Polly Donahay was absent from Thursday’s meeting.
Although the preliminary budget has been approved by board members, a final vote for its adoption will not be held until June.
Following the vote, Elling offered comment regarding his decision – noting he was looking toward the future.
"I’ve never wanted to raise taxes. However, in light of what’s been going on in the country, and with all the things that are coming down the pike, I, unfortunately, feel that we need to raise the taxes; that way we’re not drawing from our funds, general funds and stuff like that,” he said. “So, I don’t like raising the taxes, but based upon the current need and what we feel is going to be happening here in the future, we actually are going to do this,"
Elling acknowledged that many tax payers in the district may have strong opinions about the approval of the budget.
"I like the fact that we’re not raising it to the full extent that we could. And if we do have to raise taxes, I prefer that we raise taxes gradually; we don’t go up and down, up and down,” he said. “I know that’s something that’s been done in the past, and I know that doing that roller coaster-type stuff actually does cause some problems. Raising taxes is going to cause problems with everybody, but it’s one of those situations where it’s a little bit easier if we do it gradually rather than all at once."
The total estimated expenditures for the 2023-2024 Final General Fund Budget amounts to $89,377,620. This imposes a 3.83% tax increase for residents within the district, which will represent, on average, a $55 tax increase for property owners in the district next year according to an estimate released by the board.
The 3.83% tax increase for the upcoming fiscal year will generate around $999,981 in revenue, which will be used to fund additional staffing, school safety strategies, and higher health insurance costs.
The 3.83% increase would cover:
- Added staff at the Career and Technical Center (CTC), costing about $340,000 (salaries and/or benefits, with a focus on Homeland Security Education).
- An additional $180,000 in “school safety support” (salary and benefits).
- Maintenance of the district's $17 million budget reserve
- The projected $1.15 million increase in health care insurance for employees (11.9% increase over last year).
- Help fund $2 million in Renew America Schools program.
- Help pay the district's bond (loan) obligation of $250,000.
Superintendent Dr. Jacquelyn Martin provided an extensive statement regarding the increase upon a request from the finance committee made, at the May 4 KCSD Work Session. The committee requested the statement, according to Martin, so that the public is aware of all the actions that have been taken to maintain the budget by cutting costs and expenditures in the district.
"Joni McIntyre and I have been asked to provide some additional information to all of you about the financial picture for next year and the complexities that contribute to these projections," she said.
Martin emphasized that the committee wants the public to know that they are constantly searching for ways to save funds and reduce expenditures through the use of need-based budgeting procedures rather than fixed amounts per line item or yearly allotments.
One example of cost-cutting mentioned in her statement is that before ordering extra supplies, the district evaluates what the staff requests versus what they need, and then takes stock of existing inventory. By preparing ahead for items like curriculum, resources, classroom furniture, and uniform placements, this strategy has helped reduce unexpected costs.
Through position control measures, the board is continually evaluating ways to reduce or repurpose staff personnel to meet current needs. Superintendent Martin confirmed that position control measures are intended to reduce expenses without impacting students’ educational experiences. She stated that recent negotiations and contract settlements have resulted in some cost reductions in the area of personnel.
"We're constantly monitoring class sizes and seeking realistic reductions in staffing that will not have a negative impact on learning," Martin said.
"Savings have been realized with increased co-pay rates and spousal exclusion stipulations for new employees. These changes helped to offset the increased cost of healthcare coverages we see each year," she continued.
Martin stated that the district has recognized the need for specialized staff members for several years and has employed certified professional staff members such as crisis counselors, social workers, behavior specialists, school psychologists, and security and school police officers to provide a wide range of services to students. In addition to providing specialized staff, students are supported by making after-school and summer programs available to them.
Food insecurity, which has become more visible in recent years, is another element that contributes to the financial picture. Breakfast and lunch services are provided at no cost to students in the district, the statement said.
The district, according to Martin, also added new programs to the Career and Technical Center, such as Education and Homeland Security, to help meet the needs of our local workforce by filling gaps in staffing; however, as she put it, “Adding programs adds costs.”
Additional staffing and safety equipment to meet the demands of the school body and the community is another significant expenditure that the district has committed to.
Martin highlighted at the KCSD Voting Meeting on April 20 that the cost of operating schools in the district has grown due to inflation, necessitating additional revenue to cover rising expenses. She addressed this in her statement at the May 4 Work Session as well;
"Inflation is having a significant impact on our district in operational costs such as supplies, electricity, gas, water, facility projects, and maintenance. Recent energy savings projects by Keystone Central School District have been exceeding the guaranteed savings we were promised across all eight buildings where upgrades were done in 2020," she said.
Last year alone, the district managed to save almost $200,000 in just one year, which was $40,000 more than expected.
Regarding State and Federal grant money, Martin stated, "We've identified over $60 million in facility needs that need to be realized over the next 10 years. We are using and seeking state and federal grant dollars for these projects. Some of the grants require matching funds. This budget proposals include over $2.2 million in grant matches from local sources to complete $18 million worth of projects."
According to Martin, federal funding for grants hasn’t changed significantly. She asserted that as a disadvantaged rural district, we are discriminated against in the same way that was determined to be unlawful in the most recent legal dispute regarding PA school funding. The judge ruled in that case that the Commonwealth must ensure that state resources are distributed equitably.
Martin said the district’s tax collection and investment strategies assisted in generating additional revenue. Also, the Level-Up School Funding organization, which seeks to accelerate equitable school funding in Pennsylvania has been of assistance to the district.
"Some additional dollars have been provided to our district from the most recent state Level-Up Funding Formula," she said.
Martin mentioned that although this work has already begun, it's not likely that we will see results in the next two years.
“School budgets are complex and involve a lot of moving parts. Next year’s budget is approximately $6 million higher than last year but we have planned effectively to balance the budget by asking for only a partial tax increase that will generate less than $1 million in additional revenue," she said.
She added that there isn't any singular expenditure that contributes to the need for the tax increase; it's a compilation of several different factors.
"It is our responsibility to pass a respectfully balanced budget while meeting the needs of our students," Martin said.
According to a notice provided by business manager Joni MacIntyre, the Proposed Final Budget for the General Fund of Keystone Central School District for the fiscal year 2023-2024 is available for public inspection on the District website and is expected to be presented for adoption as a Final Budget at the school board meeting scheduled for June 15, 2023, at 6:30 p.m. The budget may be amended before or after final adoption.