Based on Ray Clarke’s notes below from the Finance Committee and the School Board meeting on the Earned Income Tax, sounds like it was quite a night! First off, the big news to report — there will be no EIT voter referendum question on the April primary election ballot. The same two people, Kevin Mahoney and Anne Crowley, favored taking the EIT to the voters as they voted similarly in October 2010. Please read Ray’s comments and I would like to hear from others who attended the meeting last night.
A couple of fascinating school district meetings last night. Bottom Line: a motion to advise the townships of a possible intent to put an EIT on next year’s ballot was defeated 7:2 (Mahoney, Crowley).
My own take, but watch the action for yourselves….
The usual arguments were rehearsed by both Board members and audience, but the ones that I felt carried the day were that “now is not the time” and “we’re going to try really really hard to get Harrisburg to find another of your pockets to take the employee pensions from”. Dr Brake had a well-reasoned position that also made the point that the current political climate would not allow a thoughtful debate and the Board could avoid “roiling the community” further by not putting it to referendum now.
But that was not what kept this audience member awake. Just about every board member (campaigning or not) berated the political machine for the campaign tactics.
Dr Brake contrasted legitimate “contrast pieces” with “offensive” “making stuff up”. Then Republican operative Tom Colman launched a defense of the election tactics, and acknowledged that he had orchestrated a personal campaign against the Act 1 tax in 2007. That brought up Jenny Wessels to state that she had been miss-represented in the campaign and to commend the Board for their non-partisan approach. Then followed Debbie Bookstaber, in a long soliloquy berating her colleagues for their political statements. Must see TV!
A few interesting audience comments:
Ed Sweeney: strongly against an EIT and wants the tax policy to attract the “right people” (high income earners?)
Melody Price: a thoughtful appeal for a balanced approach that considers all potential solutions.
Unknown audience member: “three words – Taxed Enough Already” (that was helpful!)
Barbara Morosse: There is more expense for the district to cut, including through teacher salary structure changes.
Notable board member comments:
Rich Brake: wants to completely recalibrate the teachers’ contract, do away with the matrix.
Kevin Mahoney: a) lest anyone thinks that companies are not interested in property taxes, consider the multi-million dollar GSK assessment appeals, b) maybe school districts should be freed up from rules that limit investment options to be able to earn returns like UPenn endowment’s 15%
Betsy Fadem: Don’t think we can use the Fund Balance to balance the budget because the School Board has committed it….
Which brings me to the evening’s opening act, the Finance Committee. Four things to remark:
 The minutes that Pattye had puzzled over were corrected: the administration proposals for the $1.3 million funding restoration were not authorized by the last Finance Committee but referred back to the Education Committee.
 A discussion of the Fund Balance commitments, which include $7.6 million of “vested employee services”, along of course with $15.4 million of “future retirement plan stabilization”. The accounting is much different to the GAAP I’m used to, but here’s my takeaway:
- These amounts are based on arbitrary board policies
- The PSERS commitment is based on the next five years, the employee services on almost but not quite the full lifetime liability
- They are only commitments to the extent that it takes a Board vote to change them
- Few if any other school districts have a commitment for vested employee services, and pay as they go.
So, “vested employee services” appears to be another way to sit on taxpayer money without fully revealing what the actual liability is, what the additions and payouts are from year-to-year, and where the funding for the liability comes from. And, in general, the PSERS liability is going straight up for the next 5 years, holds flat for the next 10, and then starts to decline. So would the policy mean that the district sequesters say $25 million of taxpayer money until that decline starts in 2025 or so?
I think that Mahoney committed the next Finance Committee to review the policy. At the very least it would be good to know exactly how all this works, and why it is that TE policies need to be different from other school districts.
 Groundwork laid for the ongoing property tax-to-the-max strategy: next year’s Act 1 Index estimated at 1.7%, Exceptions for PSERS and special education 1.7%, total property tax increase 3.4%, $2.9 million.
 The fourth thing was …… err ……. ooops …… oh yes:
The Finance Committee approved a contract with a marketing agency for selling promotional space on district property. The net annual revenue to the district is projected to be $160,000. The agency was the only one that responded to the district RFP. The contract states that the District has to approve all content, sponsors, advertisements; in the meeting it was stated that the Board approval is required.
If I think of any else, I’ll add it as a comment.