School District Budget Faces Decreasing Revenues

January 14, 2010

The Springfield School District introduced a $46.2 million preliminary general fund budget for 2010-2011 in a presentation Tuesday.

The budget includes a 6.82 percent increase in the local property tax, far above the cap allowed under Act 1, although district Business Administrator Victor Orlando said it was only a preliminary figure and would likely come down after the district submits the budget to the state for approval.

There is “a lot of work [that] will go into the next five months” before June 30, the state’s deadline for budget adoption, Orlando said.

The pre liminary general fund budget of $46,211,419 represents an increase of $1,313,753, or 2.9 percent, over 2009-2010, Orlando said.

With a tax increase of 6.82 percent, a property owner with a home assessed at the township average of $165,766, would pay $307 in additional property taxes next year, a number lower than a projection the finance committee made months ago, but “still substantial,” Orlando said.

Under Act 1, otherwise known as the Taxpayer Relief Act, the school district cannot increase property taxes more than 2.9 percent without a voter referendum or unless it is granted exceptions by the state.

Exceptions include debt service, retirement and special education and would allow officials to set the tax rate above this index without a referendum, Orlando said.

This year, Orlando said he will recommend the district utilize the exceptions, which it did not last year, when the state’s cap was at 4.1 percent.

This preliminary budget will decrease after the district submits it to the state and receives feedback, Orlando said.

The district is working with a projected decline in revenue from the local earned income tax, the real estate transfer tax and earnings from investments.

Administrators also discussed a retirement bubble that looks like it could hit public schools throughout the commonwealth in 2013 with a roughly 30 percent increase in expenditures to cover pension plans.

The school district, particularly the finance committee, has been putting aside funds in anticipation of what Orlando said could have a “tremendous” impact.

The public will be able to view the budget presentation on the school district’s Web site, www.sdst.org, by the end of this week.

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The school board must adopt a preliminary budget by its Feb. 16 meeting.