Penn Hills School District’s 2020-21 preliminary budget contains tax hike, no program cuts
Thursday, January 9, 2020 | 10:51 PM
Penn Hills School District officials would have to find a way to fill an estimated $3.2 million budget shortfall even with a real estate take hike of nearly 7%.
That’s one of several revelations made during a 2020-21 preliminary budget presentation made a special meeting Thursday.
“This is only a starting point,” said district Business Manager Eileen Navish.
Navish offered three budget scenarios to the board. No program cuts were part of any proposed plan.
The first scenario includes no tax hike and a $6.1 million deficit.
The second includes a tax increase of 1.0319 mills, or 3.6%, and a $4.6 million deficit. That would raise taxes to the Act 1 index ceiling, a state formula that limits tax hikes.
The third — and recommended — scenario includes a 2.0319-mill hike. That includes an additional mill to account for pension and special education expenses.
The current millage rate is 28.6646 mills. One mill generates about $1.44 million in revenue.
The total increase, should it be approved by the state, would generate about $2.93 million for the district.
It also would mean the owner of a property assessed at $50,000 would pay about $101 more in taxes. They now pay$1,433; that would increase to $1,534.
Owners of properties assessed at $75,000 and $100,000 would pay about $152 and $203 more in taxes, respectively.
“I’m going to fight ‘til the end so we don’t have to raise taxes again,” board President Erin Vecchio said.
Board members approved formally advertising that third option and plan to pass it Jan. 29.
The district needed to move forward with a preliminary spending plan this month in order to seek Act 1 exceptions that would allow the district to pass a tax hike of more than 3.6%.
Board members said there will be many adjustments as they move forward in the budgeting process.
“We are moving in the right direction,” School Director Kristopher Wiegand said. “We still have a ways to go. I know those of us on the board want to make sure we don’t put this burden on the back of our community (and give them) more than they can handle. We’re going to look at all available options to try to do our best to balance the challenges appropriately.”
The district is roughly $172 million in debt, largely due to high school and elementary school construction.
The board could have agreed to hold any tax hike to 3.6% and postpone its preliminary budget until May. State law requires a final budget to be approved by the end of June.
Projected revenues were listed at about $89.3 million and expenses at $92.5 million.
Expenses include $45.39 million for salaries and benefits, an increase of about $645,000 from the current school year, $17.38 million for charter/vo-tech schools, an increase of $1.38 million; and $7.48 million for transportation, a $345,000 decrease.
Dan Matsook, the district’s state-appointed financial recovery officer, said the district would have less of a deficit had it raised taxes for the current school year.
Vecchio said not raising taxes was a stipulation to Penn Hills receiving $3.3 million in state funds through Sen. Jay Costa, D-Forest Hills, this school year.
Matoosk said the district needs sustained revenue “instead of relying on gifts from our legislators that last for one year, and basically spin our wheels because of that gift.”
He also sent a message to state Department of Education officials and Gov. Tom Wolf’s office asking for a meeting to discuss increasing state subsidies.
Navish said bringing charter school students back into the district would help immensely. She noted Penn Hills has 847 students enrolled in charter schools with a per-student tuition rate of about $13,600 for regular education and about $32,000 for special education.
Penn Hills tuition rates were estimated around $11,000 for elementary students and $15,200 for secondary students.
Navish said district tuition rates apply to every student with no distinction between regular and special education.
Navish highlighted some of the staff reductions and other efforts already done to keep the district afloat.
Teachers, custodial and maintenance staff, educational support personnel and the superintendent have already committed to a pay freeze for this and next school year.
It also reduced staff by 66 for this school year. Those positions included some that were already vacant through attrition.
District officials plan to ask additional employees to take a pay freeze, review non-required programming and look to streamline positions again.
Matsook believes some personnel cuts could be made, but the district needs to be wary of how deep the cuts may get. He hopes to get expenses under $90 million.
“We could make a lot more cuts and cut deeper to the point of blood, and it’s going to impact our organization,” he said. “We need the state to step up … It’s important that we, as a group, continue to work together to do things that are going to stay away from touching classrooms in all of our buildings.”
The budget presentation’s posted on the district’s website, phsd.k12.pa.us.