Our only April board meeting was held this past Monday. The largest portion of the meeting was devoted to a presentation by Communities in Schools, updating us on their work in the district over the past two years. You can watch the report here and their presentation here.
While it is too early to draw any conclusions from the data, it was still a very informative presentation. Even though it was the bulk of the meeting, it is not receiving nearly as much attention as other shorter portions of the meeting because...
While it is too early to draw any conclusions from the data, it was still a very informative presentation. Even though it was the bulk of the meeting, it is not receiving nearly as much attention as other shorter portions of the meeting because...
Tax Season is Upon Us!
While April 15th is just a few days away, it is not just tax season for homeowners and businesses. School boards across Pennsylvania are also knee-deep in discussions among themselves, their respective administrations, and their communities about their 2019-2020 budgets and any associated tax increases.
Who is directing the increase? It's more complicated than you might think. As school directors, we are volunteers. We are residents of the community. Many of us are homeowners who also pay property taxes. We have parents of current East Penn students, parents of former East Penn students, and residents on fixed incomes on the board.
Who is directing the increase? It's more complicated than you might think. As school directors, we are volunteers. We are residents of the community. Many of us are homeowners who also pay property taxes. We have parents of current East Penn students, parents of former East Penn students, and residents on fixed incomes on the board.
| We represent nearly every generation of voting age. Generation Z (ages 18-23) is not currently represented, and won't be anytime soon unfortunately, given the ages of the slate of candidates coming up in May's municipal primary. We also represent both private and public sectors with experience in both business and education. We have a diverse board representing many segments of our community, and a wide variety of opinions and professional expertise to match. We do however share a common interest in making our public schools great and in understanding their role in building a strong community. | Budget Items at a Glance
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But we also don't like paying taxes, a sentiment that I imagine you also share.
With this in mind, we unanimously approved the proposed final budget with an associated increase of 0.92% at our last board meeting. While the budget is not set in stone and minor changes are sure to come between now and its final approval in June, this is our lowest increase in years.
We have directed the district's administration to control spending, increase the quality of education and resources available to our students. It is not an easy task, but they have done that! An increase of less than 1% is nearly unheard of in this day and age.
But still, there's a nagging "what if" we still have...
With this in mind, we unanimously approved the proposed final budget with an associated increase of 0.92% at our last board meeting. While the budget is not set in stone and minor changes are sure to come between now and its final approval in June, this is our lowest increase in years.
We have directed the district's administration to control spending, increase the quality of education and resources available to our students. It is not an easy task, but they have done that! An increase of less than 1% is nearly unheard of in this day and age.
But still, there's a nagging "what if" we still have...
What if we just didn't raise taxes at all?
This was a question I asked of our administration last year. While I certainly didn't feel this would be a prudent course of action, I felt this was something that we should see on paper for context. I requested that the administration include in their presentation a series of scenarios that would represent the impact of no tax increase.
Below is page 27 of the Long Range Fiscal and Capital Plan. In the plan, several scenarios were presented representing the impact of various tax increases. Here is the result of three 0% tax increase scenarios and none of them are any good.
Below is page 27 of the Long Range Fiscal and Capital Plan. In the plan, several scenarios were presented representing the impact of various tax increases. Here is the result of three 0% tax increase scenarios and none of them are any good.
Scenario 1a
This scenario applies a blanket 0% increase in each year. In only three years, we will have exhausted the Fund Balance.
This scenario applies a blanket 0% increase in each year. In only three years, we will have exhausted the Fund Balance.
Scenario 1b
This scenario applies a 0% increase for one year only, but notice the rebound effect. Subsequent years would require an increase of 2.85% to achieve a 5% fund balance. A fund balance of this size is one large indicator that reflects a "healthy" financial environment and attractive to lenders when financing future projects. Since this is above the projected Act 1 index, an increase of this magnitude would need to go to a voter referendum before its approval.
This scenario applies a 0% increase for one year only, but notice the rebound effect. Subsequent years would require an increase of 2.85% to achieve a 5% fund balance. A fund balance of this size is one large indicator that reflects a "healthy" financial environment and attractive to lenders when financing future projects. Since this is above the projected Act 1 index, an increase of this magnitude would need to go to a voter referendum before its approval.
Scenario 1c
This is the same as Scenario 1b, but caps the increase at the allowable 2.8% increase. Notice how despite a huge increase, we are still losing money each year.
This is the same as Scenario 1b, but caps the increase at the allowable 2.8% increase. Notice how despite a huge increase, we are still losing money each year.
As you can see, a 0% increase would be incredibly damaging to taxpayers in the long term and doesn't represent sound fiscal planning. I would one day love to see a 0% increase, but could never support such an increase if the resulting impact to taxpayers, students, and programs looked like this.
So how do we fix this trend?
Like you, I long for the day when my school tax bill remains the same from one year to the next. With one simple change, that could have happened this year, but it is not a change we can make at the local level.
At the bottom of page 15 of the fiscal plan, you'll notice a line item that is new to this year's presentation that had been requested by a fellow board member. It reads:
At the bottom of page 15 of the fiscal plan, you'll notice a line item that is new to this year's presentation that had been requested by a fellow board member. It reads:
That's a $1.6 million line item in the budget allocated to cyber charter schools, for-profit institutions that strain on public school district resources across the state, and provide an education that is empirically worse than similar programs provided by the districts themselves.
Like my namesake, I appreciate the free-market economy and recognize its impact on various aspects of our society. School districts are not immune to a free-market economy and have directly benefited from it. Many districts, East Penn included, have developed their own cyber school options in house, largely due to outside competition. Now, these districts are doing it better, and cheaper, than the alternatives. So why do taxpayers need to shoulder the burden twice when one option is head and shoulders above the other?
In an attempt to draw Harrisburg's attention to the matter, the board took up two resolutions, passing both unanimously, pleading with legislatures to reform our state's cyber charter laws. You can view that portion of the meeting here and copies of the resolutions themselves are available here.
Had these reforms already been in place, East Penn would have recouped those funds, reducing our expenditures to a level that would have allowed us to keep our tax rate the same as the previous year!
Zero. A zero-percent increase in East Penn IS possible. Through fiscal responsibility and thoughtful planning, East Penn has done their part, but we need Harrisburg's help to make it a reality.
For more information on the problem, I'd highly recommend reading my colleague and fellow board member, Dr. Munson's, informative posts:
Like my namesake, I appreciate the free-market economy and recognize its impact on various aspects of our society. School districts are not immune to a free-market economy and have directly benefited from it. Many districts, East Penn included, have developed their own cyber school options in house, largely due to outside competition. Now, these districts are doing it better, and cheaper, than the alternatives. So why do taxpayers need to shoulder the burden twice when one option is head and shoulders above the other?
In an attempt to draw Harrisburg's attention to the matter, the board took up two resolutions, passing both unanimously, pleading with legislatures to reform our state's cyber charter laws. You can view that portion of the meeting here and copies of the resolutions themselves are available here.
Had these reforms already been in place, East Penn would have recouped those funds, reducing our expenditures to a level that would have allowed us to keep our tax rate the same as the previous year!
Zero. A zero-percent increase in East Penn IS possible. Through fiscal responsibility and thoughtful planning, East Penn has done their part, but we need Harrisburg's help to make it a reality.
For more information on the problem, I'd highly recommend reading my colleague and fellow board member, Dr. Munson's, informative posts:
How can we make our opinions heard?
After a series of presentations from the administration dating back to January that delineated in detail their priorities for the budget, no member of the community has come to speak before the board prior to the last two meetings with regard to the Proposed Final Budget. The administration has done an admirable job communicating in detail about the budget, but we'd still like to hear from you! I encourage you to read the report, along with the administration's detailed presentations on their budget priorities and share your thoughts with us at our next meeting on May 13th.
If you're also concerned about PA's failing cyber charter schools and it's broken funding formula, contact your legislators and share your concerns about the impact on local districts.
Budgeting is not an easy process. There are many priorities that must be balanced, but currently, that balance is being borne unfairly by the taxpayers in our community. It will require Harrisburg's help before it improves.
If you're also concerned about PA's failing cyber charter schools and it's broken funding formula, contact your legislators and share your concerns about the impact on local districts.
Budgeting is not an easy process. There are many priorities that must be balanced, but currently, that balance is being borne unfairly by the taxpayers in our community. It will require Harrisburg's help before it improves.
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