T/E School Directors Vote to Limit Tax Increase to 2.9%

Conestoga High School's cafeteria was packed for the January 25 School Board meeting. Parents, residents and teachers came in anticipation of a vote by Tredyffrin/Easttown School Board on the District’s 2010-11 preliminary budget.

With the District facing a $9.25 million shortfall next year, a tax increase is certain. School Directors were faced with one of three choices:
  • Keep any tax increase within the 2.9% limit as set by Pennsylvania Act 1 requirements,
  • Apply to the state for exceptions to the Act 1 index, which would allow for up to an additional 3.73% tax increase, or
  • Authorize the District’s Administration to seek a voter referendum in May asking voters to approve a tax increase above 2.9%.
After a half hour of discussion, with almost every SB member expressed his/her views on the budget, SB president Betsy Fadem made a motion to vote on the District’s preliminary budget. By a 6-3 vote, the preliminary budget was not approved--with SB members Kevin Mahoney, Betsy Fadem, Debbie Bookstaber, Jim Bruce, Anne Crowley and Rich Brake voting NO, and Karen Cruickshank, Kevin Buraks and Peter Motel voting YES.

Next, the Board voted unanimously to adopt a resolution which will limit the tax increase for the 2010-11 school year to 2.9% or less. Individual members cited the unemployment rate, seniors' struggles and the district's 5% poverty rate as their reasons for supporting spending cuts over a significant tax increase.

Revenue Shortfall
The proposed 2010-11 budget projects $101.9 million in revenues and $111.15 million in expenditures. A 2.9% tax increase will produce additional revenue of $2.4 million. However the School Board could have chosen to raise taxes up to 6.63% if they'd applied for and received approval from the PA Department of Education for a special exception. Even imposing the largest allowable tax increase, a $3.85 million deficit would still remain.

Several School Board members, including Finance Chair Kevin Mahoney and SB Chair Betsy Fadem recommended tapping into the District’s "rainy day" fund. The District currently has a $28 million reserve fund balance, but will need a portion of it to cover future increases in teachers' pension costs.

Closing The Gap
Given the School Board’s decision to stick within the Act 1 limit, they will be dealing with a $6.85 million budget shortfall. Program cuts and teacher furloughs will be necessary but not sufficient to close the gap, given that those with the least seniority (and salary expense) will go first if programs and classes are eliminated. Long-term, the District may need to seek new revenue sources to balance the budget.

Next: February 8 Finance Committee Meeting
The Finance Committee will be continuing the discussion on ways to reduce costs and increase revenues at their February 8 meeting. At that time, the Administration is scheduled to present a list of proposed cost reductions and the impact of each on educational programs.

Public participation is encouraged. The meeting will be held at 7:30 PM in the T/E Administration Offices at 940 West Valley Rd., Suite 1700, Wayne. However, due to large anticipated turnout, the location may be moved to the CHS cafeteria. Check the school district website for the location and for more information on the budget.