Bethel Park School Board passed an unexpected tax cut at its’ June 25 meeting.
The board voted 6-3 to lower the property tax rate by 8.2 percent, from 22.8763 mills to 21 mills. The move will reduce revenue by about $4.7 million and homeowners should see a savings of $187.63 a year on a property assessed at $100,000.
Board members were expected to adopt an $89 million budget for the 2019-20 school year that would have kept the tax rate the same for the fourth consecutive year.
In the months leading up to the vote, the board held no public budget deliberations, which hinted at a desire from some board members to reduce the property tax rate.
That prompted members of the board’s minority, those who have resisted some efforts to cut staff, to cry foul.
“This is one of the most fiscally irresponsible things I have ever seen,” said Director Barry Christianson.
Christianson, who voted against the tax cut along with Directors Pam Dobos and Ken Nagel, argued if the board’s majority wanted a reduction to the property tax rate, they should have explored that issue months ago. That way, district administrators would have had time to analyze the finances to determine the impact a rate reduction would have on the fund balance and future years’ budgets.
Board President Donna Cook noted Bethel Park’s fund balance stands at about $20 million and the district is in very strong financial shape, so it’s time to give some of that money back.
“The taxpayers deserve some of this relief,” she said.
Bethel Park’s reserve fund is estimated to be $20 million, but most of that has been assigned to cover future pension and health insurance costs. Leonard Corazzi, director of finance, said about $6.4 million has been set aside for pension obligations and about the same amount has been earmarked for health insurance.
The district holds about $5.9 million in unassigned reserves and the pre-tax cut budget already called for withdrawing $995,050 from those reserves to balance the budget. That withdrawal will have to be much larger after the tax rate reduction and the unassigned fund balance could be as low as $200,000 by this time next year.
However, Corazzi said the board could opt to change the allocations in the reserve fund and set aside less money for future pension and health insurance costs, which should free some money to be used for other purposes.
Cook said it would be prudent to do so, since the district has been reducing staff through attrition for the past several years and future pension obligations should be lower.
Nagel said the tax cut was a political move in light of last month’s primary, where most incumbent school directors who were up for re-election were defeated on both the Democrat and Republican ballots. The reduction in revenue will hamper the new board’s efforts to reduce class sizes and invest in special education, Nagel said.
“You are circumventing the will of the public to hamstring this incoming school board,” he said.
As it stands, Jim Means and Christianson will be the only incumbents listed on the general election ballot, which will also see newcomers James Modrak, Kimberly Walsh Turner, Darren McGregor and Vincent Scalzo vying for five board seats. Incumbents Cook, Ronald Werkmeister and David Amaditz were all defeated on both parties’ ballots.
Werkmeister said he was motivated to broach the issue of a tax reduction after hearing from constituents, who insisted they were overly burdened by high taxes.
Director Cynthia Buckley noted children have to be the district’s first priority, but the board also has an obligation to hold spending in check. She cautioned against excessive spending as seen in other school districts and she urged taxpayers to pay attention.
“It’s important going forward into future school years that people watch the decisions being made and how they’re made,” she said.
Christenson said the six board members who voted for the tax cut must have met privately to hash out this plan, which could be a violation of the state’s Sunshine Act. He cited the prepared remarks that some board members delivered as evidence.
He noted the tax rate reduction went against the recommendation set forth by the superintendent and the finance director, who recommended the board adopt a $89 million spending plan that kept the tax rate unchanged.
Three members of the public expressed their disapproval, noting the tax cut would be temporary and the board would have to raise taxes in the future to fund educational programs, now that the board decided make such a large withdrawal from its savings.
“It’s a debacle,” said Sharon Janosik. “It’s sad and disappointing.”
She chastised the board for not discussing the idea in any of the budget meetings that were held in the months leading up to the budget adoption and questioned the reasons why the board would pass such a measure less than a week before the board is required by state law to adopt a budget.