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!
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
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?
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.
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 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 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.
So how do we fix this trend?
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:
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?
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.