Bethel Park School Board may ask voters to approve a tax increase in the April primary.
The district is facing a potential $6.8 million budget deficit for next year, a byproduct of the tax cut the previous board passed last June. The board is considering raising the property tax rate to the level seen before the tax cut, but in order to do that, voters will have to approve it through referendum.
“It was a very bad decision from the previous school board,” Director Kimberly Walsh Turner said at the board committee meeting Jan. 21.
State law limits the amount school districts can raise property taxes without first getting voter approval. Bethel Park could raise taxes by 3.1% without going through a referendum. The property tax rate would increase to 21.651 mills from its current rate of 21 mills, but the district would still have a $6.8 million shortfall.
If the board wants to set the property tax rate to the 2018-19 level, 22.8763 mills, it will need voters to approve it because it equates to a tax increase of 8.9%.
The board will consider starting the referendum process at its regular meeting Jan. 28. If the board approves, a ballot question will appear on the April 28 primary ballot.
The district has savings to cover the deficit in the short term. Its general fund reserve balance is estimated at $25 million, but the reserve could be completely depleted in as little as three years, according to estimates from Leonard Corazzi, the district’s finance director.
Even if voters approve a tax increase, the district will still have to dip into its reserve to balance the budget for next year, but the amount should be much less.
“We need this to get us on a more stable footing,” said Director Ken Nagel.
Former school board member Jim Means urged the new board to be cautious, since the district’s estimates often represent a worst-case scenario. Bethel Park expected to have to withdraw from its reserve fund to balance the 2018-19 budget, but it instead finished the year with a $3.4 million surplus because revenue was higher than anticipated and spending was lower.
The preliminary budget for 2020-21 stands at $92.4 million.
Means said Bethel Park still has too many employees when comparing the district to its neighbors, and he urged the board to continue reducing staff through attrition to curb spending and keep taxes low.
“I urge you to continue the process of right-sizing the school district,” he said during public comment.
Director Russ Spicuzza noted the budget changes dramatically between now and June, when the board will have to adopt it, so the amount of a potential shortfall will probably be much lower.
“I wouldn’t jump off the high dive just yet,” he said.
Other directors agree the preliminary budget includes plenty of unknowns, but the board will need to start the referendum process by the end of February in order to have enough time to get the referendum placed on the primary ballot.
Since 2006, when the state passed the law that limits school districts’ ability to raise property taxes, few school districts have attempted to raise taxes through referendum and even fewer have been successful. However, voters in Bethel Park have agreed to raise their own taxes before. In 2013, voters approved a referendum to raise taxes to pay for the new fire station on Brightwood Road.
At the Jan. 28 regular meeting, the board will also consider opening an assistant principal position at the high school and to start searching for someone to fulfill that role. Currently, the high school has a principal, an assistant principal and two deans. Proponents of the idea argued neighboring high schools have at least three principals, so adding another certified principal in Bethel Park would allow the staff to handle the workload more effectively.