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An early budget for York Suburban School District indicates a budget gap of $2.4 million that, even with taxes raised to its state-assigned limit, will still leave the district with a $1.3 million shortfall.

District Director of Finance Corinne Mason updated the school board at its Monday, Jan. 8, meeting about the preliminary $57.5 million budget.

She said that while the current figures could give an indication of what to expect, the budget consists of "moving numbers from now until the board actually adopts the budget in May."

The budget anticipates revenues of about $55 million and expenditures of $57.5 million, leaving about a $2.4 million budget gap.

Both figures are up from the $54.7 million in revenue and $55 million in expenditures budgeted for the 2017-18 school year.

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A significant majority of the district's revenues for the 2018-19 budget (82 percent) is projected to come from local sources, mostly in the form of property taxes.

State and federal revenues make up the rest of the budget, at 17 percent and less than 1 percent, respectively.

State basic and special education funding figures are budgeted at the same levels as the 2017-18 school year, though Mason said she expects an increase in state funding through the basic education subsidy.

However, it is unknown how much that amount will be until the state Legislature approves a final budget, which it has not been known to pass on time.

Known cost increases for the district come in the form of employee benefits, as the state school employee retirement system known as PSERS will increase its mandated district contribution rates from 32.57 percent to 33.43 percent, or an increase of more than $358,000 for York Suburban.

While the increase might be hard to swallow, Mason adds the new rate is actually a drop from the previously expected increase to 34.15 percent for the 2018-19 school year and is the smallest increase in five years.

"This is a welcome change, if you will," she said.

PSERS contribution rates are still projected to rise every year for the next four years to more than 36.3 percent by the 2022-23 school year.

Charter and cyber charter school payments, health care costs, new English language arts textbooks and new hires are other factors causing the spending increase, according to the presentation.

Options: Assuming the $2.4 million budget gap is what's on the horizon, Mason said the board could use a combination of budgetary moves to close the gap, including:

  • Increase property taxes up to the state-assigned tax cap of 2.8 percent, bringing an additional $1.1 million in revenue. 
  • Use funds from the assigned retirement fund balance (currently $2.6 million).
  • Use funds from the district's unassigned fund balance.
  • Use of the district's insurance trust fund balance (currently $4.4 million).
  • Use of the district's capital reserve fund transfer (currently $1.8 million).

So far, the board is not considering applying for an exception to its tax cap of 2.8 percent assigned by the Department of Education.

Instead, administrators are recommending approval of an "opt-out" resolution that certifies the board will not approve a budget with a tax increase above 2.8 percent.

Board members will vote on the resolution at their next regular monthly meeting on Jan. 22.

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