Preliminary Schools Budget Shows $2.7 Million Shortfall
Upper St. Clair School District is planning to file for an Act 1 exception. If granted, the district could raise taxes higher than the property tax cap.
The preliminary 2012-13 budget for the Upper St. Clair School District shows a $2.7 million shortfall.
Superintendent Patrick O'Toole shared the numbers in a presentation with the school board on Monday night. He called the outlook "sobering."
Under Pennsylvania's Act 1 of 2006, school boards are limited in how high they can raise real estate taxes. Dr. O'Toole said next year, Act 1 will allow the school board to raise taxes by 1.7 percent or .41 mils. If the school board chooses to raise taxes, the amount raised would be $670,000—not enough to cover the $2.7 million shortfall.
A new law passed this summer allows Pennsylvania school districts to apply for an Act 1 exception if the districts can show they need to raise taxes because of pension costs, special education costs or grandfathered debt service. If the state accepts the application, the districts would be able to raise taxes higher than the cap without a referendum on the ballot.
There are a number of reasons for projected shortfall. Act 1 only allowed the district to raise taxes by .33 mils for the 2011-12 budget. The district had been planning to raise taxes by .4 mils to cover the middle school renovation projects.
Another reason for the shortfall is the lack of state funding the district is receiving. Dr. O'Toole said the state gives the district $972 per pupil, which is the third lowest in Allegheny County. He said most districts receive $2,000 or $3,000 per pupil.
The $2.7 million shortfall is lower than the $6.2 million projected in April. In September, the district's finance department refinanced and took advantage of the historically low interest rates. The district also received a little more money from the state than they planned for and they reduced staff.
The district must apply for the Act 1 exception by the end of January 2012.
"Almost every school district in Allegheny County—90 percent—will be filing for exceptions this year," said Frosina Cordisco, business manager.
"Obviously we have a lot of work to do," Dr. O'Toole said. "Nobody likes to raise taxes and we try everything we can not to do that...there are still rather difficult times ahead for us."
"There is no way we will be able to address these numbers by using just one measure. Not by just cutting spending, not by just raising taxes," said Harry Kunselman, president of the school board.
Dr. O'Toole ended the presentation by saying he would stay in touch with the psychological impacts the projected shortfall may have on the staff.