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Central Greene ponders tax increase

4 min read

WAYNESBURG – Central Greene School Board received its annual audit presentation Tuesday evening from Steven Cypher of the accounting firm of Cypher and Cypher and also passed a tentative 2015-16 budget that could involve a tax increase.

“Your fund balance was stable and has gone up a bit. This is what we like to see,” Cypher told board members. “Your total fund balance is slightly less than $5 million. That is 7.1 percent of your current year budget. You’re right where you want to be.”

That being said, Cypher told the board the district needed to consider provisions in its teachers’ contract that funds health benefits for both retirees and their spouses until age 65.

“Most districts are backing away from that a bit,” Cypher said.

He said the district currently had the luxury of the fund balance but relying on that could come back to bite it “very quickly.”

“I’ve never been a school director so I don’t know what it’s like to sit there and raise your own taxes. I’m sure it’s not fun,” Cypher said. “Retirement costs will be 32 percent of payroll in 6 years. It’s going to be tough. Sadly, raising millage alone probably won’t (cover the necessary amount).”

That 32 percent increase is not exclusive to Central Greene School District. It is the projected amount from the Pennsylvania School Employees’ Retirement System that will be experienced by school districts across the commonwealth.

Cypher said there is a “disturbing trend” taking place where school districts are left with no alternative but to raise taxes after receiving its share of monies from the state government, federal government, grants and services due to “sky rocketing retirement costs,” and reductions in government funding.

“There’s no such thing as a millage bank. The index tells you how much you are permitted to raise taxes. If you don’t raise it, you can’t save it for another year,” Cypher said. “Your millage increase should parallel your cost increase.”

Central Greene business manager Debbie Crouse told the board that in order to apply for an exception that would allow the district to raise taxes above the index set by the Pennsylvania Department of Education it had to approve a budget with an increase higher than the index.

The board, by a vote of 7 to 2, approved the preliminary budget with board members Joe Ayersman and Eleanor Chapman casting the dissenting votes. The preliminary budget includes anticipated expenditures of $34,214,784, revenues of $32,953,194, a transfer of $500,000 from the debt service fund and use of $761,590 from the general fund balance. The revenue amount is based on a millage increase in the district of 2.0323 mils to 27.5 mils.

“That by no means means you have to have any kind of tax increase,” Crouse said. “You still have several months to work on this and see if we get any other funding.”

Crouse said there have been no projections floating around as to what the state’s contribution will be for the 2015-16 school year.

“I can’t imagine it would go down, but I also can’t expect an increase,” she said.

In approving the preliminary budget, the district will take the steps required by the Department of Education to obtain approval for the use of one or more Act 1 real estate referendum exceptions, including advertisement of the Act 1 Referendum Exception Notice.

There are currently only four referendum exceptions that could be approved by the Department of Education to allow a district to raise rates above the Department of Education’s established index without voter approval: special education expenditures, retirement contributions, grandfathered construction debt, and electoral construction debt.

Crouse broke down what the impact of a tax increase would mean to property owners at the index rate, at an increase of 1.0323 mils, and at the 2.0323 mil maximum.

For a homeowner with a residence valued at $50,000 the increase for the 2015-16 school taxes would be $31.84 at the index. An increase of 1.0323 mils would result in an additional $51.62, and at an increase of 2.0323 mils, it would be $101.62. To calculate the possible increase for a home valued at $100,000, one would simply multiply those figures by two.

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