UPPER DUBLIN — A 2020-21 preliminary $106.9 million budget calling for a 2.6 percent property tax increase was reviewed at a Feb. 13 Upper Dublin School District town hall meeting that drew only a handful of residents.
The school board voted in December to cap a tax increase at the 2.6 percent Act 1 index set by the state. The increase, setting millage at 35.3151 mills, would translate to an additional $196 in taxes for a property assessed at the township median of $196,890 for a total tax bill of $6,953.
A mill equals $1 for every $1,000 of assessed value.
The proposed $106,961,919 budget, a $3.7 million spending increase over 2019-20, would result in a $2,863,078 spending gap to be made up by the fund balance. The $2.89 million 2019-20 fund balance reflects putting a planned transfer of $1.4 million to the capital reserve “on hold.”
Chief Financial Officer Andrew Lechman termed the 2.6 percent tax increase a “place holder.”
“We’re still fairly early in the process,” district Superintendent Steve Yanni said, referring to it as a “needs-based,” budget that is “educationally and fiscally sound … fair to students and taxpayers.”
“A budget is a list of priorities,” he said. Among those priorities are having: 100 percent of students read at grade level by the end of third grade; students proficient in math by seventh grade and proficient in writing by eighth grade, he said.
“We don’t want to see class sizes balloon,” he added.
While the state and federal budgets for next year are still in limbo, the district usually gets about $20 million from the state, Lechman said.
Local property taxes provide the lion’s share of the budget, but commercial tax reassessments have had an impact on revenues, he said. As a result of an appeal for the Prudential property on Welsh Road — “Prudential was the largest taxpayer” — the district lost $1.2 million in tax revenue this year, will lose $800,000 next year and $670,000 every year after, he said.
“This was the largest reassessment,” Yanni said, adding “it’s why assessed value is not changing,” despite new development. “Those reassessments really hurt.”
There is a “potential $6 million in new revenue from [planned] new development,” Lechman said, though it is not known the actual assessed value after completion and the timing.
Salaries and benefits make up about 76% of the budget, debt service is 11% and 13% is for “all other” costs, such as transportation, utilities, curriculum, etc., he said. “Major budget pressures are personnel, debt service and benefits,” which are expected to contribute to a $5 million budget gap in 2022-23, he said.
PSERS, the teachers’ retirement fund, has gone from 5.6% of teachers’ salaries in 2010-11 to 34.51% next year, Lechman said.
Several residents, noting the retirement contribution is tied to salaries, suggested the district keep that in mind when negotiating contracts.
“We’ve had many years of generous contracts,” resident Anita Brister said. “Because the pension increase [percentage] is known, the district should be conservative with salary increases.”
Brister also said she would like to see data comparing per pupil spending, debt service and millage with other districts in the county.
“When you pull out districts that are very high or very low [property taxes], we are in line with our peers,” Yanni said. “We are within a few hundred dollars in per pupil spending.”
Responding to questions about debt service, Lechman said, “the Sandy Run borrowings were done in three, $10 million borrowings.” Next year, when the bulk of the work is done, “there will be a $35 million issue; after that $5 million to $7 million to finish,” he said.
The high school borrowing has 10 years of the original 20 years left, for which the debt service “will start falling off for three years in 2028-29,” board member Mark Sirota said.
The district plans to do monthly updates as changes to the proposed budget are made, Yanni said.
“Probably in May we will have another town hall,” he said, before a final budget is voted on in June.