Business & Finance

Why Methacton Will Pay More Taxes if Budget is Formally Approved

This slide, presented as part of the Methacton School Board's proposed 2014-15 budget, was shown on May 20 to the board and public. The board passed a preliminary budget on May 27, which will be advertised to the public until its vote for final approval on June 17. Credits: Stuart Whiteleather

On Tuesday night the Methacton school board voted to increase taxes for the residents of its school district. An increase of 2.1 percent, or around $103.73 additional for the average homeowner per year will be included, should the board pass the final budget as is. So, why the extra taxes? Here is a breakdown of what is in and what is out of the proposed budget, which will be voted on during a June 17 public meeting.

According to the district, it is all about the PSERS.

“The increase in the District's required contribution to the Pennsylvania School Employee's Retirement System [PSERS] and increasing special education and charter school costs, combined with stagnant federal funding, local and state revenues, present the greatest challenges in building the budget,” said Angela Linch, the district’s coordinator of communications and community services. “PSERS continues to be the single largest expenditure increase in the 2014-15 budget. Net of state reimbursement, Methacton’s cost increase from 2013-14 to 2014-15 for this budgetary item will increase by over $700,000.”

Sign Up for E-News

The 2.1 percent increase adds 0.57 mills to the community’s tax rate, leaving it at a new rate of 27.90 should the district pass the current proposal.

“A resident whose home is valued at the average residential assessment of $180,767 would see a $103.73 increase in real estate taxes, resulting in a 2014-15 tax bill of $5,043.43 (over a 2013-14 tax bill of $4,939.70),” said Linch.

The district’s director of business services, Stuart Whiteleather, said that in the past, the district has used a number of savings methods which included:

·      Outsourcing food services to Armark

·      Creating an activity fee

·      Offering early retirement incentives

·      Joining the Bucks/Montco Health Consortium

·      Reducing building budgets

·      Reducing professional staff

After an initial budget in January would have created a need for a 4.52 percent increase (or $222.34 increase for the average homeowner), the district’s administration felt it had done a solid job of dwindling down expenses and finding sources of additional revenue to create the current proposal.

“We are on the bottom third of all schools in Montgomery County,” explained Whiteleather when it came to the amount residents paid in real estate taxes. “We are in the bottom half for millage.”

What has come out of the 2014-15 budget to result in the savings? Whiteleather said that significant changes since a Feb. 18, 2014 presentation of the budget included:

SAVINGS EXPECTED

·      $600,000 savings from transportation outsourcing

·      $300,000 in PSERS net savings from transportation outsourcing

·      $170,000 savings in building and department budget reductions

·      $230,000 in teacher retirements

·      $500,000 savings in medical and prescription rate decreases

·      $579,000 in EIT, interest earnings, transportation reimbursements, Evansburg State Park payments

·      $110,000 savings in legal fees

·      $100,000 savings on utility costs

·      $90,000 savings on the debt/budget reserve

·      $244,000 back from an ABG/RTL Grant

Whiteleather credited the joining of the Bucks/Montco Consortium for both the medical/prescription and the utility savings.

Several other changes were forecably made to reduce spending and hit the originally proposed amount of budget for the 2014-15 school year, which totaled $99,852,325. Those reductions in expenditures included:

REDUCED EXPENDITURES

·      $198,146 for unpaid leave, charter benefits, retirements

·      $48,209 reduction in payment to vocational education

·      $731 saved in staff salary deductions/benefits

·      $104,668 reduced from legal/travel and supplies expenses

·      $3,003 for decreased salary/benefits/supplies from nurses’ offices

·      $111,648 reduction for facilities costs

·      $111,609 for salary/benefits/First Student outsourcing

·      $58,464 removed from software/technology costs

·      $10,485 decrease in salaries, benefits, supplies for Student Activities

·      $41,287 out for debt services

·      $50,000 saved by putting only $200,000 into budget reserve (instead of $250,000)

With the proposed budget as is, the increase of 2.1 percent in taxes would allow for the collection of $78,407,558 in local taxes, $19,625,754 from state, $509,059 from federal funding and $1,015,000 from “miscellaneous” revenue sources. Those totals reflect 78.76 percent of the annual budget coming from a local source of taxes.

A final approval of the budget as proposed will be voted on at a public school board meeting at Methacton High School at 7 p.m. on June 17. The meeting will be held in the high school’s LGI Room. The start of the fiscal year begins on July 1.

In the meantime, the public has a minimum of 20 days, as required by law, to review the proposed budget.

A full version of the district’s proposed budget is available online at www.methacton.org/budget.

Of the 67 counties in the state of Pennsylvania, Montgomery County is the fourth highest for property tax, ranking at an average cost of $3,834 per year for the average homeowner, according to tax-rates.org. The counties of Chester, Delaware and Bucks rank higher.

According to the Tax-Rates website, the average Montgomery County resident is paying $3,834 in property taxes each year, while those in Methacton are slated to pay an average of $5,043.43.

Neighboring Norristown School District has a proposed 3.2 percent increase in taxes facing its residents, according to its website.

The board also discussed at its May 20 meeting, during which the proposed budget was previewed by the board and public, expenditures for a “Shannondell litigation matter” which the district’s solicitor, Frank Bartle, would not allow to be discussed, as it is currently still in the courts.

All that was mentioned as a matter of record was that there is currently $1 million in an account being saved for the pending outcome of the litigation. Furthermore, an additional $500,000 would be added during the 2014-15 school year’s budget to bring the account’s total to $1.5 million.

Neither board nor administration could comment on the litigation, due to the fact that it is still in the courts. The cause or pending outcome is unknown at this time.

The proposed budget passed at the May 27 school board meeting with a vote of 6-1, with only school board member James Phillips voting against the tax increase.

TAP Into Another Town's News:

You May Also Be Interested In

Sign Up for E-News

Lower Providence

Upcoming Events

Police Blotter

Press Releases

Columns