11-Mill Tax Increase Adopted in 2011-12 Tentative Budget at CASD

(GantDaily File Photo)

CLEARFIELD – A gloomy picture of the 2011-12 preliminary budget was painted to the Clearfield Area School District Board of Directors at its special meeting Monday night, where it was tentatively approved with an 11-mill tax increase.

The proposed budget and tax hike received almost unanimous approval with an 8-1 vote. Board member Rick Schickling cast the only disparate vote for the budget, which calls for $35, 921, 152 in total expenditures and an estimated total revenue of $32, 135,550.

According to Business Administrator Sam Maney, newly elected Gov. Tom Corbett appears to have plans to eliminate $1 billion in state aid to schools this upcoming year. The governor’s proposed budget is expected to be released sometime in mid-March, he said.

On Jan. 28, Charles B. Zogby, secretary for the office of the budget, alerted the chairmen of the Senate and House Appropriations Committee to the more than $4 billion shortfall looming in the state’s 2011-12 budget based on the preliminary projections.

“Governor Corbett requested the budget office assess options to reduce state spending in the current fiscal year. In light of the fact that the general fund has ended each of the last two fiscal years in a deficit position, the current year shortfall and the enormity of next fiscal year’s budget deficit make immediate action imperative to begin to bring the general fund back into balance,” Zogby wrote.

According to him, Corbett had $364.3 million of the current-year appropriations placed into the budgetary reserve, including the remaining $337 million in state basic education subsidies for the rest of the year. The reduction in the state Basic Education Funding appropriation will be offset by the $387 million in federal Education Jobs, also Edujobs, program monies that have yet to be appropriated by the General Assembly.

He wrote these monies were available to states in August 2010 and were to be awarded to school districts on a timely basis in 2010-11. Corbett also intends to reinstate the $50 million in funding that was placed in the budgetary reserve by his predecessor back in August 2010.

“With this action, no school district will receive less funding than was originally included in the enacted budget signed by Governor Rendell on July 6, 2010,” Zogby wrote. However, when asked on Monday night, Maney noted that neither Edujobs dollars nor federal stimulus aid will be available to school districts for the 2011-12 fiscal year.

In the present situation, Maney said the district has $4.2 million in its fund balance. However, property taxes would still have to increase by 11 mills, an equivalent of $1.2 million, for the district to just balance its preliminary budget this upcoming year.

Across the state, Superintendent Dr. Thomas B. Otto advised that superintendents “have been charged” by state officials to evaluate their school districts’ provisions to students, such as athletics, extracurricular activities and family and consumer science programs.

“It’s not a pretty picture . . . We hope it doesn’t come to this,” board President Dave Glass said. “But we stress that this is only precautionary. We didn’t pass the budget here tonight. Things may improve over the next two, three months. We can’t stress enough that this is strictly precautionary.”

Each year, the district must choose between the adoption of either a preliminary general fund budget or a resolution stating that taxes will not be raised above its adjusted index. A school district’s taxes may be increased up to its adjusted index without approval, Maney said.

Maney said the state’s base index was calculated at 1.4 percent for the 2011-12 fiscal year. However, the district had its market value/personal income aid ratio come out at 0.6699 for the current fiscal year, generating an adjusted index rate of 2 percent. The current preliminary budget does not require the board to raise taxes above its index, Maney said.

The Act 1 index is used to determine the maximum tax increases that do not require court, state or voter approval for each tax a school district levies. The base index is calculated by averaging the percent increases in the Pennsylvania statewide average weekly wage and the federal employment cost index for elementary/secondary schools.

In addition, school districts with a MV/PI aid ratio greater than 0.4000 have the value of their index adjusted upward by multiplying the base index by the sum of 0.75 and their MV/PI aid ratio, according to the PDE Web site.

Otto said that any school district considering the possibility of a tax increase above its adjusted index was required to adopt a preliminary 2011-12 budget by Feb. 16, and that deadline prompted the special board meeting Monday night.

A school district’s preliminary budget and proposed schedule of tax rate increases must be submitted to PDE by Feb. 21. Once the school district’s proposed tax rate increases have been reviewed, the PDE will notify in writing by March 3 if any further action is required.

According to the PDE Web site, any tax increases exceeding a school district’s index must: reduce the tax rate increase to its index; submit a referendum of exception from PDE or the Court of Common Pleas; or have the tax rate increase approved by the voters during the primary election May 17.

If a proposed tax rate increase exceeds a school district’s index, it will be required and permitted a referendum exceptions to the PDE or the Court of Common Pleas. However, the PDE will only approve a referendum exceptions if a school district demonstrates a need by adopting a balanced budget that contains a tax increase in excess of its index.

Clearfield schools must adopt its final budget by June 30.

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4 thoughts on “11-Mill Tax Increase Adopted in 2011-12 Tentative Budget at CASD

  1. got pointers

    Where is the fiscal responsibility? It’s rather ironic our society has been demanding fiscal responsibility from our leadership on the State and Federal side of public policy, yet the same people who vote in those elections are in a position to make those TOUGH decisions of living within our means on a local end and appear to be choosing status quo. They have some tough decisions to make in the coming months. Let’s hope they can make them for the betterment of our community.

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