AVON GROVE SCHOOL BOARD TO CONSIDER OPTIONS FOR BALANCING THE 2009-2010 BUDGET
West Grove, PA — The Avon Grove School District Board of School Directors is scheduled to consider a resolution at the Jan. 22 Board meeting to opt out of the accelerated budget cycle set forth by Special Session Act 1 of 2006 and to certify that the District’s 2009-2010 real estate tax rate would be set within the allowable index limit. The Board was scheduled to consider the resolution at the Jan. 8 Board meeting, but postponed action on the item until after the District’s Finance Committee holds its meeting on Jan. 13.
The District’s adjusted index limit for the next fiscal year is 5.4 percent, which means the Board could approve a property tax increase of up to 5.4 percent, or 1.29 mills, without a voter referendum. At this time, a real estate tax increase within that limit may be necessary in order to balance the District’s 2009-2010 budget.
According to the first draft of the 2009-2010 preliminary budget, total revenues for 2009-2010 are expected to be less than the total revenues of the $69 million budgeted for 2008-2009. As a result of the current economic conditions, the District experienced significant decreases in revenues in 2008-2009 from both realty transfer taxes and interim real estate taxes.
Revenues have also declined due to a significant decrease in real estate tax assessments and lower interest earnings. As a result of real estate assessment appeals, the District has lost $551,510 of income. Based on current interest rates, the income from interest earned is projected to decline by approximately $350,000 from the actual amount earned last year. The District is not anticipating any increase in revenues from the Commonwealth of Pennsylvania in the next fiscal year. The District remains optimistic that the state will maintain existing levels of funding to the school district.
Anticipated expenditures for the next fiscal year, with no new positions or programs added, total $71.1 million and may exceed projected revenues by approximately $2.8 million. Salary and benefits costs will increase in 2009-2010 along with tuition costs for the Chester County Intermediate Unit’s vocational-technical program and the cost of contracted special education services, such as occupational and physical therapy, as well as the cost of out-of-district programs.
The projected shortfall is the equivalent of 1.62 mills, or an increase of 6.8 percent in real estate taxes. As the projected shortfall in 2009-2010 exceeds the amount of the District’s maximum allowable tax increase without a referendum, the Board discussed several options to balance the budget for 2009-2010. A combination that includes reducing expenditures, increasing the real estate tax rate, and using a portion of the general fund balance will likely be necessary.
The District’s current real estate millage rate of 23.82 mills has remained unchanged for the last five years. Avon Grove School District has not raised taxes since the 2003-2004 school year.
The Avon Grove Administration and Board of School Directors stressed that additional work needs to be done to develop and finalize the 2009-2010 budget.
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Posted: Monday, January 12, 2009, 3:45 PM
