Eastern district raises taxes, depletes fund balance
The Eastern York school board passed a 3.7 percent tax increase as the district faces a dwindling reserve fund balance that is estimated to drop even further for the 2017-18 school year.
The final budget, adopted May 18, projects $43.2 million in revenue and $44 million in expenditures for the upcoming school year, leaving a deficit of approximately $800,000.
The budget was reduced by nearly $298,000 from its original proposal because of reductions in health care costs, several department budget cuts and deferring capital improvements, according to business manager Teresa Weaver.
To offset the remainder of the deficit, the millage rate will increase from 22.43 mills to 23.26 mills, representing a 3.7 percent increase in property taxes. For an average home in the district assessed at $121,510, the tax hike represents a $106 increase in the homeowner's tax bill.
The district could have raised its taxes by as much as 6.29 percent after receiving exceptions from the Pennsylvania Department of Education to exceed its assigned tax cap of 3.2 percent.
Last year, the Eastern school board raised taxes by 6.7 percent amid an audit that outlined a fund balance that has fallen for several consecutive years.
Fund balance: The unassigned general fund balance, which has been steadily decreasing over the past five years, will drop further during the 2017-18 school year, according to the preliminary budget.
The unassigned fund balance is money reserved to be used for any reason at the discretion of the school board. Aside from its use to balance budget, the unassigned fund balance is generally seen as a reserve to fund unforeseen events such as damage to a school from a weather event or damages to be paid out as a result of a lawsuit.
Between the 2011-2012 and 2014-2015 fiscal years, Eastern’s fund balance declined by $4.2 million, or 71 percent, according to a state audit.
The unassigned general fund balance is estimated at $480,260, a 55 percent decrease from last year’s $1.07 million balance.
The average unassigned balance of all school districts in Pennsylvania is 6.3 percent of total expenditures, according to the Pennsylvania School Board Association. The new fund balance at Eastern will comprise just 1.09 percent of the budget.
According a July 2016 state audit, the school board’s policy states that the district “will strive to maintain an unassigned general fund balance of not less than 5 percent and not more than 8 percent of the budgeted expenditures for that fiscal year.”
Residents: The proposed tax increase isn't sitting well with some district residents.
"Well there's that saying, the only two things certain in life are death and taxes," said Wrightsville resident Albert Weisser. "And they're taxing us to death."
Weisser said the budget has too many components not directly related to education, such as health, welfare and retirement, the last of which he said the district or the state "absolutely cannot sustain."
As a remedy to the problem, Weisser said he is in favor of helping fund school districts through a sales tax increase, similar to the state Senate Bill 76, which would abolish school property taxes and raise and expand the state sales tax, among other reforms.
That 2015 measure failed narrowly in a tie-splitting vote. Sen. David Argall, R-Schuylkill, has said he plans to re-introduce legislation similar to SB 76 this year.
Weisser said he often sees eight to 10 pages of sheriff's sales of foreclosed homes in newspapers.
"I know there's a lot of (people) that may not be able to pay (their property) taxes," he said.
While he does not know anyone who has lost their home because they couldn't pay their taxes, he said he knows several seniors who have "bailed out" of their homes and moved to an assisted-living facility to save money.
"The whole thing gives me a nose bleed," Eric White, a member of the Wrightsville Borough Council, said in reaction to the property tax increase.
He said he is "outraged" as a multiple-property owner that taxes will once again go up in his district.
White added he believes tax increases should only be left to a public referendum. He believes the board is too comfortable turning to residents to balance the budget.
"The school is too quick to go to the well," he said.
By the end of the fiscal year in the passed budget, Eastern’s unassigned general fund balance will have declined by more than 91 percent since 2011.