Pottsgrove Seems Ready to Settle for .7% Tax Hike

By the time the talking was done Tuesday night, Pottsgrove School Board President Robert Lindgren said his sense of the school board is that it will support a tax hike of seven-tenths of a percent (or .7%) in June when the board votes on the final 2019-2020 budget.

But not before Business Manager David Nester made a plea for inching it up a little higher to begin to sock away money for the remaining $10 million  in capital needs the district will have in the next few years.

"We've had a good budget this year," Nester said during a review of the numbers. "We started low and we've had the ability to trim the budget down to a workable level."

That trimming involved coming up with ways to deal with an increase in expenses of $2.3 million that has a variety of sources -- $1.2 million in personnel costs "just to maintain the people we have here now;" a $588,000 increase in charter school tuition in the coming year; $240,000 to add a third language to the curriculum and the hiring of a "crisis counselor to deal with the mental health issues we're seeing on the secondary level, among other things.

Offsetting that is the retirement of 12 teachers, health care savings and more revenue than was expected, needing just .7 percent more in taxes to close a $240,000 budget gap.

But Nester suggested a little bit more might be wise, either going to 1 percent, 1.25 or even 1.5 percent, to prepare for known capital needs, as well as the unknown.

He said in the last four years, budgets have raised taxes less than 1 percent and that is no way to come up with the targeted $11.2 million of the $15 million in capital projects the district outlined several years ago.

Nester said the capital reserve fund has $7.6 million and the district spent $2.7 million on capital costs this year and has another $2.2 million teed up for next year's construction season.

"It's better to add a small amount to the revenue stream now, when it has less impact on taxpayers," said Nester. "When I first started here, we had three years of zero tax increases and then we had to raise taxes 9.9 percent. It was not pretty."

It is much easier for taxpayers to absorb three years of 3 percent increases "than three zeros and a nine," Nester argued.

But it's an uphill argument.

Board Vice President Al Leach said he had spoken with many stakeholders after this suggestion was raised and it was uniformly rejected. "I understand the point you're making, but nobody tells Comcast to charge them an extra $50 to keep the bill lower next year."

Nester noted that in addition to the capital needs, unexpected things outside the district's control, like the 2008 collapse of the economy "when all those homes we were expecting vanished," could create occur, leaving the district's revenue stream constricted by the tax limitations of the Act 1 Index.

Then it could be programs and teachers on the chopping block to balance the budget, he warned. "I'm not saying we're there, but we could be there in the blink of any eye."

But there is no housing crisis right now in the district, quite the opposite noted board member Ashley Custer.

She questioned if its true that Nester's budget anticipates 20 homes being sold at the new Spring Valley Farms subdivision in Lower Pottsgrove, noting "they've sold 55" and that they are selling for higher prices than the first "because these new homes have basements."

She also pointed to new commercial construction in Upland Square in West Pottsgrove as well as new "affordable homes along Route 100" in Upper Pottsgrove -- all of which would increase property tax and property transfer tax revenues.

Nester said he does not anticipate revenue increases by counting houses, but has announced for an increase of $3 million to $4 million over the current assessed value of the district's taxable property.

Robert Lindgren

"This is what we are elected to do, to pick the route we take," said School Board President Robert Lindgren, who is a longtime member of the facilities committee and added that he would support going as high as 1.5 percent for the tax increase in the next budget.

He also said he could accept .7 percent, but is opposed to zero tax hike.

Lindgren said the district has already spend about $5 million of the $15 million in capital outlay planned for. "You do the math, we have $10 million still to do and $7.6 million. We have to rebuild that somehow."

"Part of our responsibility is to make these decisions, then defend them and explain them," he said, adding that those explanations will be much more difficult if they result in delayed revenue enhancements and big tax hikes or program cuts down the road.

"When you have people with pitchforks in the audience, that is a less-than-desirable atmosphere for making good decisions," he said.

And he agreed with Nester, noting "we've outlined the things we see coming, but the things that mess you up are the things you don't see coming and we should ask ourselves, 'do we have a plan for that?'"

Board members Scott Hutt and Charles Nipper both said they could support the .7 percent increase. "Zero is irrepsonsible, but I think we should hold the line," said Hutt.

"Sticking at zero is creating a disaster," said Nippert.

No vote was taken, but Lindgren summarized that unless he heard otherwise from board members, he would suggest the administration move forward with plans for a final budget that raises taxes .7 percent. He did not hear otherwise.

As my Twitter followers know, I was unable to access the district's wifi system Tuesday night, so my Tweets were labored and limited by the one-bar of coverage I had inside the high school. So, here are the Tweets from the meeting, such as they are:

To Tax or Not to Tax