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TAX NEWS - 2010

Pennsylvania Tax: Haverford School District's budget has 5.9 percent tax rise

HAVERFORD — There were no surprises in the final budget for Fiscal Year 2010-2011 that school officials recently approved by an 8-0 vote.

As expected from prior discussions, the budget raises property taxes 5.9 percent, to 24.4743 mills per dollar, or $24.47 per $1,000 of assessed valuation on real estate.

The hike will cost homeowners an average $221 annually. However, residents eligible for the Homestead Exclusion will see $200 deducted from their total tax bill via gaming revenues.

The increase will raise a total of about $5 million to help close the gap between $81 million projected revenue without it, and $86.5 million in expenditures.

This budget also draws an additional $294,968 from a thinning fund balance, which will drop to $430,954.

While this year's Act 1 cap limited tax increases to 2.9 percent, the district applied for $3 million in referendum exceptions, including increases in medical premiums, retirement benefits and debt service.

In the discussion that ensued, school director Joe Martin attributed one-half to one-third of the increase to facilities improvements made over the past decade, including construction of two new elementary schools, renovations to the former Oakmont School and a complete overhaul of Haverford Middle School, currently in progress. A detailed update will be presented Thursday

Martin also noted that Haverford gets "very little back from Harrisburg" when compared to other districts. State funds account for 18 percent of the budget. Since a wage tax remains "not politically possible," property taxes are the primary revenue source, at 83 percent.

School Director Karen Renshaw noted that administration implemented staffing reductions and cost-containment measures worth $1.5 million, thereby staving off a 7.7 percent tax increase in earlier projections.

At the same meeting the board furloughed 14 instructional assistants and a building assistant. Two occupational therapists were hired at salaries of $60,900 annually. However, Director of Special Education/Pupil Services Valerie Burnett said providing these services in-house would save $200,000 a year.

In other business, the board reviewed impending spikes in employer contributions to the Pennsylvania School Employees' Retirement System, with rates expected to go from 4.7 percent in 2010 to 29.2 percent in 2013. Business Manager Rick Henderson outlined strategies and proposals that have been advanced for dealing with the crisis.

But "there are no magic bullets," School Director Larry Feinberg said, adding that he did not expect to see any legislative action until after November elections. However, efforts to convey the magnitude of the issue to the legislature appear successful.

Additionally, the board approved an item for submission to the Pennsylvania School Boards Association's legislative platform, supporting "strict limitations" on the amount of funding individuals, groups of individuals, political action committees or corporate entities can contribute to a candidate, the candidate's election committee or legislative caucus.

Feinberg described the present situation in Harrisburg as "out of control."
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