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By MARK GUYDISH markg@leader.net
Wednesday, March 12, 2003 Page: 3A
A proposed state law that says school districts can’t raise taxes if their
piggy banks are too full is at best good for a laugh and at worst a pointless
penalty, local administrators said.
The law would cut off state funding for school districts that raise
property taxes when they have a fund balance, or spare cash, greater than 8
percent of their budgets.
“Someone brought that up at the superintendent’s meeting, and most of us
laughed,” said Jeff Namey, superintendent at Wilkes-Barre Area, where the
fund balance is a scant $555,669 – less than 1 percent of a budget hovering
near $70 million.
At least four of Luzerne County’s 11 school districts would have no worries
if the proposal becomes law, primarily because they have drained reserves or
have been unable to build them up because of hard times and shrinking tax
bases.
Audits for the 2001-2002 school year show that, along with Wilkes-Barre,
Hanover Area has exhausted its reserves, and Crestwood, Pittston Area, and
Wyoming Valley West started this school year well below the 8 percent limit.
Additionally, budget projections for this year showed three more districts
expect to end the school year with reserves slightly above the 8 percent mark:
Greater Nanticoke Area, Lake-Lehman and Hazleton Area.
Several districts would have to spend big chunks of their reserves if the
proposal – tacked onto Gov. Rendell’s $21 million budget – becomes law. The
2001-2002 audit showed Wyoming Area sporting a $4.4 million fund balance,
while Dallas had stockpiled more than $5 million – both are roughly 20 percent
of the district budgets.
Dallas Superintendent Gilbert Griffiths said the law would “penalize
school districts that have been fiscally responsible in making sure their
budgets are sound and tight. It hurts us.”
Griffiths also said the 8 percent limit is too low, considering how fast
reserves can be drained by unfunded mandates, unexpected property tax breaks
and emergencies.
As examples, he cited rocketing health care costs, and a sharp hike in
teacher pensions approved by the state, with much of the cost passed on to
districts.
If the state mandates full-day kindergarten as many expect, Griffiths has
estimated the cost to Dallas at more than $800,000 to build more classrooms
and another $250,000 for the added staff in the first year.
“At that rate, $5 million doesn’t go very far,” he said.
Namey, who was forced to close two schools this year because of budget
constraints, had mixed feelings about the proposal. “You would have to ask,
if a district has a significant fund balance, why would they want to raise
taxes?”
On the other hand, he and Wilkes-Barre Area Business Manager Ralph Scoda
pointed out that the law would hinge on projected budgets – and one reason for
a healthy fund reserve is to cover gaps when the projections don’t pan out.
Scoda noted that property tax abatements, unexpected cost increases and
abrupt changes mandated by the state all make projections difficult to narrow
down.
“The numbers jump all over the place,” Scoda said. “How are you going to
predict to 8 percent?”
Mark Guydish, a Times Leader staff writer, may be reached at 829-7161.