West Chester School District

T/E School Board Passes 3.3% Tax Increase; Highest Percent Increase in the Area

The T/E School Board meeting on Thursday night was rather anticlimactic.  Most of us who have been following the budget process were not surprised by the 3.3% tax increase (1.7% Act 1 Index, 1.6% referendum exceptions) for the 2012-13 school year.  Based on the District’s average residential assessment of $252,601, this translates to an average increase of $155 per homeowner in their tax bill.

The Act 1 Index increase will produce projected revenue of $1.5 million and the exceptions increase projected revenue of $1,498,916. The total revenue produced by the 3.3% tax increase is $2,998,916.  The 2012-13 tax will be levied at the rate of 19.2628 mills, on the assessed valuation at a rate of $19.2628 per $1,000 assessment; an increase of .6154 mills from the 2011-12 tax rate.

How does TESD tax increase of 3.3% increase for 2012-13 school year stack up against neighboring school districts?  The following local school districts have approved their budgets for 2012-13 and  needed to include the following tax increases:

  • Radnor School District: 3.21% tax increase
  • Great Valley School District: 3% tax increase
  • Haverford School District: 2.73% tax increase
  • Lower Merion School District: 1.99% tax increase
  • West Chester School District: 1.7% tax increase
  • Downingtown Area School District: 1.7% tax increase
  • Phoenixville School District: 1.66% tax increase
  • Unionville-Chadds Ford School District: proposed 2.65% tax increase in Chester County and a 1.74% decrease in Delaware County (the difference comes changes in the gross property valuation of the two counties) to be approved at UCFSD meeting on Monday, June 18.

Following the final budget summary, discussion and resident commentary, the school board members were presented the opportunity to weigh-in on why they were voted for or against the 2012-13 budget.  The 2012-13 budget passed 7-2 with school board members Liz Mercogliano and Rich Brake providing the dissenting votes.  Brake provided a lengthy 30-minute oration, which offered historical details of what brings the District to this point and his reasoning for voting against the 2012-13 budget.

Ray Clarke also attended the school board meeting and offers his thoughts on last night’s School Board meeting. Thanks Ray!

Comments from Ray Clarke … 

1.  Karen Cruickshank reported that the tone in the TEEA negotiations is “increasingly positive”.  One small signal of this is the memorandum of understanding that removes the requirement for the district to pay for “advanced studies assistance”, in return for dropping the demotion idea for 2012/13.  Amazingly, this saves $360,000 – and it’s not even all the tuition that is paid!  (Payments are continuing for those on the lowest Bachelors steps).

 2.  The General Fund Balance debacle continues.  At its root is the fact that the Board treats this as a completely discretionary slush fund, with absolutely no rules about how it is to be used.  I believe that it is completely unacceptable for $30 million of taxpayer money be be treated so cavalierly.  Just one example: last year the “commitment” for PSERS “stabilization” was $15.4 million, this year it’s $3.6 million.  It’s not that the difference has been used to stabilize PSERS, it’s just that the number is a plug for when other things have been accounted for.  Ridiculous.  Why even have that item in the first place – we plan to raise taxes for it anyway.

Having said that, the changes in this year’s commitments do move us in the right direction.  $10.4 million will be moved into the Capital Fund, where it will be used for the one time expenses that we’ve discussed here are the appropriate uses for the Fund Balance.

Also worthy of mention is the commitment for the liability for vested employee services.  This went up by $0.8 million.  The actual payment was $0.3 million;  It’s interesting that the actual employment expense was therefore $0.5 million higher than was recognized in the operating statement, another problem deferred for future taxpayers.

3.  Which gets me to Dr Brake.  He treated us to a half hour analysis of the school district’s finances and the changes over the last decade or so, with desktop slides.  I encourage all to look for the video.  He voted against the tax increase, and argued for “an entirely new status quo” for the school employees.  Here are some notes I took with my commentary:

– The drop in revenues from assessment appeals offsets the increase from increasing the tax rate for the exceptions.  He used this to suggest we have reached taxing capacity.

– Special education is a “ticking time bomb” and the increased costs of autism “threaten public education”.  Relatedly, we heard in the Policy Committee how parents of non-residents, shopping for schools, want the right to come into classrooms to observe TE”s special education programs.

– All entities (governments/households, US/Europe, etc) have a “pathological addiction to spending beyond our means”.  [An OT comment: In a long run he’s right that this is unsustainable, but in the short run, national governments able to determine monetary policy can have a stabilizing role when consumers all of a sudden come to that unsustainable realization.  The problem in the US is that the political actors cannot agree on the long run plan to get the house in order, and in Europe, they have a completely crazy monetary union without a fiscal union].

– For TE routinely taxing to the max is unsustainable and not the solution.  I note that the agreed 3.3% tax increase this year, and the subsequent annual 3% increases in the 4 year projection model accumulate to an increased tax bill of $600 per year for the average residential assessment.  And there’s still a $4 million deficit in 2016/16.

– He is now going to pay more attention to the Fund Balance.  Good!

The Clock is Ticking Down for T/E School Budget . . . Will Property Tax Increase be the Highest of our Neighbors

The clock is ticking down . . . the T/E School Board votes on the final budget for 2011-12 on Monday, June 13, 7:30 PM at Conestoga High School.  The preliminary school budget contained a property tax increase of 3.8%.  Will that tax increase remain in the final budget or is possible that the school board members may consider a lower increase?

The school board and the administration have battled their way through the 2011-12 budget since last fall, with regular school board meetings as well as finance and special budget meetings.  The board and administration thoroughly reviewed many budget strategies and made difficult educational and programming decisions. The school district reached agreements for the 2011-12 school year with the teachers union (TEEA) and with the non-instructional union (TENIG).  In the spirit of shared sacrifice, union members from TEEA and TENIG showed their support for the school district and agreed to a variation of a salary freeze to help the bottom line of the District’s 2011-12 budget.

According to the TEEA agreement with the T/E school district, the teachers will have their salaries frozen for the first 6 months of the 2011-12 school year based on their final paycheck of the 2010-11 school year.  As part of the agreement, TESD agreed there would be no involuntary furloughing or involuntary demotion of teachers for 2011-12.  The cost savings for the TEEA agreement is approximately $1 Million to the school district.

The agreement reached between TENIG and TESD is a zero percent wage increase for the 2011-12 school year.  The savings to the school district with TENIG’s salary freeze is $300K.  Adding the additional reduced overtime wages and the total TENIG savings to the District is approximately $450K.

The school board members applauded the efforts of TEEA and TENIG . . . the combined total help from the two unions represents nearly $1.5 million in savings to the school district. 

Here’s my question . . . given the substantial level of savings, due to TEEA and TENIG’s spirit of shared sacrifice, will the school board also recognize the ongoing sacrifices of the taxpayers in this school district?  Will the school board consider a reduction in the proposed 3.8% property tax increase?  The preliminary 2011-12 budget could not predict the $1.5 million savings from the unions, so should the taxpayers expect the final budget to reflect those savings?  I believe that the 3.8% includes taking the full Act 1 exemptions but maybe in light of the union savings, the percentage increase could be reduced.

In anticipation of TESD’s final budget vote on Monday, I thought it would be interesting to see where the currently projected 3.8% property tax increase measures up against other local school districts. I think that it is fair to use Radnor, Lower Merion and Great Valley school districts for comparison.  Generally speaking, these school districts are comparable in level of education quality and I would think that the economic climate of the taxpayers is similar.  Each of these school districts has approved their final budgets —

  • Radnor Township School District1.4% tax increase Lowest RDSD tax increase in years. RTSD credited the Radnor teachers’ sacrifice in reaching a contract agreement for the low tax increase.
  • Great Valley School District 2.9% tax increase  GVSD Superintendent Alan Lonoconus, said of the tax increase, “We tried very hard this year to make sure the impact to programs was as gentle as possible. But we also kept in mind the economic conditions not only of our district, but of the nation.”
  • Lower Merion School District3.3% tax increase  Lowest tax increase since 1984-84 fiscal year

Although not an adjacent school district and perhaps not as highly ranked academically as Radnor, Great Valley, Lower Merion and T/E school districts, I was fascinated by West Chester School District’s final budget decision —

  • West Chester School DistrictNO tax increase.  The 0 percent tax increase balanced WCSD budget by taking $3 million from their fund balance.

It is not surprising that the taxpayers of WCSD overwhelming supported the decision of their school board leaders not to increase taxes.  In reviewing the demands of their school budget over the last months, there was much discussion between school board members and residents in regard to the severe economic conditions facing the residents, rising gas prices, high unemployment, etc. Many taxpayers in the WCSD complained that they are already financially pushed to the limit — the 0 percent tax increase decision came as welcomed news.

As it now stands, unless the T/E school board members reconsider, a property tax increase of 3.8% is on the table for a vote at Monday night’s school board meeting; this increase will represent the highest increase among our neighbors. TESD is a great school district, and one for which we all can be proud, but likewise could be said for Lower Merion, Great Valley and Radnor school districts.  My guess is that the argument that some will make is that TESD currently has a lower tax rate than these other mentioned school districts and therefore taxpayers are in a better position to afford the tax increase.  Correct? 

I have not done a research analysis but I believe that TESD may have the highest fund balance of any of these neighboring school districts. (In fact, I think I read somewhere that TESD fund balance is one of the highest in the state).  Some could argue that the fund balance represents over-taxing of residents in prior years, so . . . now that the taxpayers of this community need financial relief can we ask that the TESD use more of the reserve and lessen our property tax increase?

To help the community, the teachers, secretaries, custodians, cooks and maintenance personnel in this school district have shown us the meaning of shared sacrifice.  Is it possible that TESD will acknowledge the sacrifices of the District taxpayers, and lower the expected property tax increase?  Or, is this just wishful thinking on my part . . . ?

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