Perkiomen Valley School District Business Administrator Jim Weaver presented a preliminary budget to the school board last night, which includes a $6.5 million, or 8.6 percent, increase over the 2012-2013 budget, and a $6.1 million shortfall for the 2013-2014 school year.
The biggest budget increase for the district is an almost 37% increase in the district’s required contribution to the Public School Employees' Retirement System (PSERS), which increased the budget $2.5 million on that expenditure alone.
Other expenditures included $1.6 million for salary increases, $305,000 for new salaries, a debt service increase of $684,000, other benefit increases of $639,000, and $300,000 in additional charter school tuitions,among other smaller increases.
Negotiations are beginning with the Perkiomen Valley Education Association, so Weaver’s presentation assumed a “certain rate for budget purposes.”
Regarding revenue, the district saw gains in both real estate assessment and earned income tax. However, he says, there could be a negative affect relative to federal revenues depending on the “fiscal cliff.”
The state-approved two percent real estate tax increase will generate $1.2 million in additional revenue to cover the shortfall.
Weaver suggested that the board use $1 million in general fund reserves to shrink the shortfall to $5.1 million off the bat, but board member Gerry Barnefiher asked that it be removed from the initial talks to present a clearer picture of the district’s financial status to the public.
“This gives the impression that the true shortfall [with a two percent tax increase] is $3.9 million when, in reality, it is $4.9 million” said Barnefiher.
The district currently has to decide if it will increase taxes by the state-approved 2 percent, which would leave the shortfall at just under $5 million, or it will opt to use exclusions to raise taxes above the index without a referendum. That decision must be made by a resolution before Jan. 31.
“As a reminder, last year’s first look presentation was an 8.52 percent [real estate tax increase],” said Weaver. “Remember, we ended up at a 2.25 because of the budget process, we massaged it, we looked at wants versus needs, we made cuts, we looked at some hard facts and figures. We’ll do the same thing this year.”
Weaver’s entire budget presentation can be viewed on the Perkiomen Valley School District Website.