Board (Kennett) struggles with looming tax increase-Daily Local News 01/16/2011

The Daily Local (dailylocal.com), Serving Chester County, PA


Board struggles with looming tax increase
Kennett Consolidated officials anticipate budget shortfall of more than $1.1 million
Sunday, January 16, 2011
By WM. SHAWN WEIGEL, Special to the Local News

KENNETT SQUARE — The Kennett Consolidated School District's finance committee is working to keep a proposed tax increase as low as possible.

In his report to the board of school directors on Monday night, board member and finance committee Chairman Mike Finnegan said the committee has made several recommendations to that end, including dipping into some existing fund balances.

"Essentially, we've been very successful in keeping our expenses at a minimal increase over the current year, but our income from various federal, state and local sources continues to decrease dramatically," Finnegan said. "To help to cover some of this gap, we proposed appropriating an additional $1.5 million from fund balances."

He said stimulus funds received through state and federal sources were eliminated, contributing another $1 million in lost revenues.

"Under this scenario, next year's budget deficit is currently $1,192,979," Finnegan said. "Every year, more and more of the burden of funding the district falls on the local taxpayer."

He added that a 3.84 percent property tax increase would be required unless the board can find places for additional cuts in the 2011-12 budget.

A preliminary budget will be developed based on a recommendation not to exceed a 3.84 percent increase, Finnegan said.

At the 3.84 rate, the tax rate would increase from 24.7781 to 25.7293 mills, or roughly 0.95 mills.

A mill is a tax of $1 for every $1,000 of assessed real estate value.

A 3.84 percent increase means an average increase of $185 on next year's school property tax bill.

In his report, Finnegan said district Business Manager Mark Tracy estimates the budgeted expenditures are likely to increase 1.3 percent over the current budget.

"Cost saving initiatives such as the early retirement incentive and variable rate financing for Bancroft Elementary were main contributing factors to the low increase in expenses," Finnegan said.

But Finnegan said in an e-mailed statement that an increase above the 1.4 percent allowed by state law might be unavoidable with the preliminary budget.

"Keeping even with last year due to decreases in real estate assessments alone would require us to exceed the index," he said. "We need to be conservatoire in our estimates and plan for the worse."
He said the process was made difficult because of the delayed state budget schedule, which is not due until March and, Finnegan said, will likely include additional cuts in state funding.

"Last year, we called for a preliminary tax increase of 4.8 percent in January, but were able to reduce that to 3.4 percent by the June final budget," Finnegan said. "We anticipate that the final increase this year will be less than 3.84 percent, but it is impossible to tell at this point just where it will be. It is an ongoing refinement process for the next six months."

As far as any additional cuts, Finnegan said that there isn't much left to trim that wouldn't begin to affect student services.

"Even with the opening of Bancroft Elementary School and the conversion of Mary D. Lang into a full-day kindergarten center, we have limited the growth in expenditures to less than 1 percent for next year," he said. "The required tax increase is almost entirely warranted to recover dwindling revenue sources. It took a lot of work to get us where we currently academically, and we would not want to go backwards."

The deadline for the 2011-12 preliminary budget to be available for public review is Jan. 27.

The preliminary budget will be reviewed in detail at the Feb. 7 finance committee meeting at the district office.

URL: http://www.dailylocal.com/articles/2011/01/16/news/srv0000010602791.prt

© 2011 dailylocal.com, a Journal Register Property