Draft Pottsgrove Schools Budget Sees $1.7M Deficit

The Pottsgrove School Board met virtually on Jan. 26.

As Pottsgrove school officials get started on their months-long budgeting process, the first hill to climb is a projected $1.7 million deficit.

To close it without making any changes in the draft budget now being worked on would require a 4.4 percent tax hike, "which will not happen," according to Business Manager David Nester.

Although the state-determined tax cap, or "Act 1 Index," would allow Pottsgrove to raise taxes as high as 4 percent, Nester noted that for the last five years, Pottsgrove has kept its tax hikes below 1 percent.

In fact the budget draft he presented to the school board at the Jan. 26 meeting is in-line with the timeline set out by the state, but is so preliminary as to be largely meaningless.

"Virtually everything will change before we adopt a budget in June," Nester told the board, "but the timeline must be maintained."

With Gov. Tom Wolf set to release his budget next week, Nester said Pottsgrove's preliminary budget is built on the assumption that there will be no increase in state aid.

The biggest increase in spending will be an $850,000 increase in charter school tuition, which represents a 37 percent increase, said Nester.

The other major factors are a $400,000 increase in wages, due largely to existing contracts, and $250,000 for new buses since the district did not buy its annual replacement in the current school year.

That brings preliminary expense estimates in at about $70 million, and estimated revenues at $67 million. The potential $2.9 million budget shortfall will be cut nearly in half by the availability of $1.2 million in the retirement reserve the district has been building over the past several years, Nester explained.

The district also has a $1.5 million surplus in the current budget, and could get as much as $1.8 million more from additional relief funds at the state and federal level, "but we're not counting on that at this point," Nester said.

Another solution to closing the budget gap would be to cut school programs by $1.5 million, he said.

Other factors are possible retirements of senior teachers, whose replacements would be paid less. The budget assumes three retirements and more would provide additional savings.

Also in play is the construction of Sanatoga Green, the massive mixed-use project now under construction near the Sanatoga interchange off Evergreen Road.

Those buildings will be come taxable as they come online, although the children who will live in some of the housing being built there could also arrive in the coming school year, Nester said.

"A tax increase would be the last resort" to cover the budget gap, said Nester, who added that it might be time to start building small, regular tax increases into the budget process to prepare for capital costs in the future.

A vote on the preliminary budget Nester proposed could occur as soon as the next school board meeting, scheduled for Feb. 9.

The "proposed final budget" adoption is tentatively scheduled for April 27 and the final budget adoption set for June 8.