Draft Spring-Ford Budget Shows $7.5M Deficit

One of the more bizarre aspects of the budgeting of public money in Pennsylvania is the timing.

Public schools, which operate on a fiscal year calendar, must begin putting together the budgets that will be adopted in June, six months ahead of time, long before they have any concrete idea of what their costs will be.

On top of that, the state tells each school district what its maximum local tax hike can be without indicating for months what the state contribution to that budget will be. 

This year, Spring-Ford's cap, called it's "index," is 3 percent.

Making it even more of a theater of the absurd this year is the impact of COVID-19. 

As a result, the Spring-Ford school officials find themselves in the strange position of preparing their budget for the coming year at the same time the state legislature is wrapping up its budget for the current year.

Most know that Harrisburg adopted a half-year budget due to the uncertainties surrounding the epidemic which, in May, was just unfolding. Nevertheless, as this year's budget is finally wrapped up, five months late, the unique pandemic-drive circumstances have a way of highlighting the difficulties school budgeters face when trying to come up with accurate forecasts.

That said, James Fink, chief financial officer for Spring-Ford took his shot Monday night, kicking off the budget process with a broad brush look at a $182.3 million spending plan for the coming year, which is about $10.2 million more in spending than the current year.

Making budget forecasts more difficult, said Fink, is the fact that we are only four months into the current fiscal year and two months into the school year, compounded by the fact that the impact the COVID-19 epidemic is having on the economy and costs.

As it stands now, the forecast is for a $7.5 million deficit between spending, which he said will increase by about 6 percent -- driven mostly by salaries -- and revenues that are expected to rise only 1.7 percent.

Despite many unknowns, Fink said personnel costs, which comprise 70 percent of budget's expenses, are likely to increase by about 5 percent.

Current estimates also see an 8.6 percent hike in state retirement costs and a 5 percent increase in medical and dental insurance costs.

The draft indicates using $300,000 from reserves to help close that deficit, along with a property tax hike of 1.5 percent to generate $1.65 million in additional revenues.

Many things will change in this draft as the current year unfolds and the picture of revenues and expenses clarifies.

The board is scheduled to vote on this preliminary budget in January, but nothing becomes final until  a final vote on a final budget, not due to take place until May.

Click here to read the Tweets from the meeting.