Preliminary budget keeps hike under Act 1 limit, but Corbett budget could change final numbers
By Mike McGann, Editor, The Times
EAST MARLBOROUGH — A little bit like being forced to drive down a foggy mountain road at night without headlights, the Unionville-Chadds Ford Board of Education, gave preliminary approval to the school district’s proposed 2013-14 budget, Monday night.
While the Pennsylvania Department of Education (PDE) requires school districts to start the budget approval process in the opening weeks of the year, the state government is under no such requirement, meaning districts have no solid information about state funding plans when they must start adopting preliminary budgets — which makes some of the numbers in this proposed budget little more than an educated guess, district officials say.
A similar disconnect of schedule continues through the budget process; while schools must adopt final budgets during the month of June, they must often do so with little more than a best bet what the final state budget will look like, as the state is only required to adopt a budget by June 30, a deadline it has missed at times in recent years.
Because of the lack of data, UCF school officials developed the preliminary budget under the assumption of relatively flat funding from the state, numbers similar to those received for the 2012-13 school year.
The preliminary budget calls for a tax increase within the state’s Act 1 limit of 1.7%, with a $72.7 million budget. Were the preliminary budget to be adopted as is, taxes would increase by 1.83% in Chester County and .89% in Delaware County for an aggregate rate of 1.67%. The variance in rates between counties comes from the difference in assessed value between the counties and varies year to year.
Although the initial budget document does not plan for seeking exceptions from the PDE for pension costs — some $800,000 in additional costs would be eligible — the Board of Education is opting to keep options open, depending on whether or not Gov. Tom Corbett seeks to cut the roughly $10 million in state aid provided to district.
The district is not eligible for an exception on special education costs, largely because in recent years the district saw a reduction in the number of students needing such services. Eligibility, according the the district’s director of business and operations, Robert Cochran, is based on previous years spending. Based on more recent increases in student need, Cochran said it was likely that the district would be eligible for the special education exception for the 2014-15 budget.
The pension exception, some $806,000, is the only wiggle room the board and administration will have in terms of raising taxes if Corbett attempts to move again to slash state funding. Although in previous years the idea of filing for exceptions met at minimum token resistance from board members, there was none Monday night, with some board members making it clear that if further tax hikes are needed, they will be the responsibility of the governor.
Corbett should reveal much of his budget plan during the annual budget address on Feb. 5. In previous years, Corbett sought to cut reimbursement of Social Security and Medicare taxes, although the legislature rejected that initiative. Right now, the state pays half of those taxes — estimated to be some $1.3 million in 2013-14 — plus half of the state pension costs, another $3 million.
Should Corbett seek to change those funding numbers, changes may be needed to the spending plan, including putting off the handful of modest new programs in the proposed budget — a technology initiative for eighth grade students being the largest from a cost standpoint — and potentially another trimming of the district’s payroll.
Two things that would appear to be making this budget less painful than in recent years — assuming flat state funding — better than expected costs for employee health care and funds set aside during previous years to reduce the impact of spiking pension costs. While the funds set in reserve — some from bond refinancing, other funds set aside from various budget surpluses — will soften the impact of what are expected to be yearly increases in pension costs over the next four school years — the cumulative cost will likely continue to be a concern.