Central district reduces max tax hike, passes final budget
Central York School District officials were planning on a maximum tax increase for the district's 2019-20 budget, but board members opted to use reserve funds to buy down the tax rate.
"We have more income and we spend more, and we've had this conversation time and time again," said board member Jane Johnson, who pushed for lower taxes to be a priority in the 2019-20 budget.
A budget of about $92.95 million in expenditures passed June 17 — slightly lower than April projections of $93.3 million — with revenue of $92.76 million and a tax increase of 2%, leaving a deficit of $193,822 to be covered with PSERS reserves.
It was approved with a 6-1 vote, with board member Karl Peckmann opposed and members Veronica Gemma and Joseph Gothie absent.
Central received $115,000 in new revenue based on interim/rollback taxes from a Local Economic Revitalization Tax Assistance property accepted last month.
By May, the district had reduced its 2.9% tax increase from April projections down to 2.55%, but business manager Brent Kessler said on June 10 that the district would still need a 2.35% tax increase to balance the budget.
The district has a debt service of $8 million each year, which will drop off in four years. In order to maintain those payments, the district is slated to increase taxes each year. But the question came up of whether that was necessary.
"It's cumulative and everybody's feeling it, and I think that there are a lot of people that will say that they love what Central does and they don't have a problem with the tax increase, but that's not fair to say that that's the majority of the people," Johnson said.
If the district would cut its $300,000 transfer to capital reserve projects, she said, maybe there wouldn't be a need for a tax increase at all.
But Gothie, reached by phone after the meeting, said that as much as the board would hate to raise taxes, members have to think about the future.
"We're robbing Peter to pay Paul whenever we take money out of the capital reserve," he said, adding that there would be some big capital expenses in the next few years, which could also come back on taxpayers.
Back in May, the suggested capital reserve transfer had been $500,000, and that amount was reduced to $300,000 by June 10, but board members discussed cutting it even further.
Kessler said to have a balanced budget, the district could go as low as a 1.9% or 1.8% tax increase without any transfer or a 2% increase with a $100,000 transfer.
However, millage could also be lowered with money from the fund balance, said board member Michael Wagner, and board President Eric Wolfgang agreed, saying it's important to fund the capital reserve.
Kessler added that once the debt drops off, it could help in replenishing capital reserve funds.
But Gothie said cutting capital reserves now "may end up moving the goalpost further" on the district being debt-free, noting a previous HVAC project that had added another year to the debt service.
Ultimately, board members approved the $300,000 transfer but reduced the tax increase to 2%, which will be $66.28 more on the average homeowner's bill.