No real estate tax increase is called for in Mt. Lebanon School District’s 2020-21 proposed final budget.
The school board, which approved the proposed $105.7 million spending plan during an April 14 meeting held through a videoconferencing platform, plans to vote May 18 on the final budget. If approved the real estate tax rate will remain at 24.79 mills.
To hold the line on taxes, board members and administrators opted to tap into the district’s fund balance, or reserve money, to help make revenues match expenditures during the coming academic year.
As per board policy, the unassigned fund balance normally is maintained at 6% or more of total budgeted expenditures. Reducing that figure temporarily to 5% frees up $1 million toward balancing the budget, according to Robert Geletko, district director of business.
“This is a one-time situation we hope to use,” he said.
The total drawn from the fund balance for 2020-21 is $2.775 million, from an accrued $12.1 million.
Sarah Olbrich, school board president, acknowledged the work that went into crafting the spending plan, especially considering the unprecedented disruptions to the academic year related to COVID-19. She also credited measures taken in the past to maintain the fund balance at a relatively high level.
“This is our rainy day. We do not take this lightly,” she said about drawing down the surplus. “But we know that this budget is necessary for many in our community. We can’t do this every year, or even as often as some would like, without an impact to the quality of education that we strive to provide as a community.”
The long-range plan is for the fund balance eventually to return to the level of more than 6%.
“Unfortunately, this will mean that when I come back in budget season next January of February, in ’21, our initial estimates will have projected tax increases for the board to consider,” Geletko said.
A presentation regarding future budgets shows a possibility of the real estate tax rate rising to 27.5 mills by 2024-25 in order to restore the fund balance.
“With the appropriate management of our expenditures and our personnel, with incremental tax increases over the next three to five years and us being extremely fiscally prudent, we can certainly handle this and recover from it,” Geletko said.
He also pointed out that another probability is on the horizon:
“Our idea with the shifting of the fund balance around is to appropriately fund our capital spending and get to the date of 2023, where we can refinance some of our 2013 bonds that will then be able to fund more capital projects.”
Even without a tax increase, the 2020-21 budget provides for maintaining continuity within the district in terms of staffing levels, proceeding with capital projects and making purchases with regard to textbooks and technology upgrades.
Geletko said the budget was developed using only the district’s normal revenue streams.
School board member Jacob Wyland elaborated.
“This budget was achieved using only Mt. Lebanon money, meaning that if any stimulus, any aid, were to come from the federal government or the state government in the future, that would effectively be a positive windfall to this budget,” he said. “Similarly, we are currently not operating our high school, our middle schools or any of our elementary schools at their full operational capacity,” with resulting savings on supplies, utilities and other resources.