TAX NEWS - JUNE 2010

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Western Wayne Tax: Western Wayne approves $37.2M school budget with 3.4 percent tax hike

SOUTH CANAAN - Western Wayne School District directors approved a final $37.2 million budget Monday for next school year that nixes an earlier $1.9 million projected deficit through spending cuts, a property tax hike, and use of the district's so-called rainy day fund.

Contracted teacher and personnel salary hikes and ballooning health care and pension contribution obligations drove increased expenditures for the 2010-11 school year, resulting in the projected $1.9 million revenue shortfall.

On a 5-2 vote, school directors approved a 3.4 percent property tax increase - amounting to about $47 more on a residence assessed at $100,000, or to $1,431 total - raising the millage from 13.845 to 14.316.

One mill represents $1 in tax for every $1,000 in assessed property value.

To close the deficit gap next school year, school directors also opted to use approximately $890,000 of the $3 million rainy day fund. Health care expenditures were further cut by negotiations among staff to voluntarily switch to less costly plans.

Three teacher positions also were eliminated through retirements and two were cut by not filling resignations.

School Director James Salak, who voted against the budget, said he believed the district could have used "a little bit more" of the rainy day fund to soften the property tax hike. "I don't think we could have eliminated" a tax hike this year, Mr. Salak said.

School Director Gary Podunajec, who also voted against the budget, said he did not agree with the higher tax levy. He declined to elaborate on what specific measures could have been taken to avoid that outcome.

Mr. Podunajec said the district, however, will need as much revenue as possible in light of a dramatic spike in employee pension obligations beginning in 2012, as mandated by the state Public School Employees' Retirement System, which manages the fund.

"It's going to bankrupt (school) districts," he said. "We're working on a shoestring budget right now."
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