Bethel Park scraps tax increase ballot question
Bethel Park School Board scrapped plans to place a referendum on the spring primary ballot that would have asked voters to approve a property tax increase.
The school board agreed to remove the ballot question at the committee meeting April 21. The COVID-19 pandemic, which prompted massive layoffs, shuttered schools and the postponement of the primary to June 2, triggered this decision as well.
“Now is the time to focus our efforts on weathering the uncertain economic storm and supporting our families in every way possible,” said board president Pam Dobos. “We recognize the economic struggle so many are facing, and now is not the time for the public to consider this particular referendum issue.”
In January, the board approved the referendum, which would have restored the property tax rate to the level seen in the 2018-19 school year, 22.8763 mills. The previous board slashed the tax rate to 21 mills last June, a few months before many of those school directors were replaced by a slate of new candidates.
“Because of the millage reduction that was approved last year, this puts us in an incredibly difficult position. It has an accelerated effect to draw down the fund balance,” said director Barry Christenson.
Removing the ballot question “is the right thing to do right now,” he said.
State law requires voter approval whenever a school board plans to raise taxes above a certain amount, known as the Act 1 index. The maximum tax increase in Bethel Park next year is 3.1% without a referendum. Restoring the tax rate to the 2018-19 level would have been an increase of 8.9%.
Bethel Park is projected to have a deficit of $9.6 million next year, according to Leonard Corazzi, director of finance. To bridge that gap, the board will likely raise taxes to the state index and withdraw an estimated $6.7 million from its fund balance.
That withdrawal would leave the district with about $715,000 in its unassigned fund balance by next summer. To replenish that fund balance, the district could move some money that has been earmarked for future pension and retiree health insurance contributions, but several school directors noted that would be a stop gap measure.
“We’re obviously not in a sustainable position. It’s not a great picture,” Christenson said.
COVID-19 will likely also have an impact on the district’s revenue, with more people out of work. Expenses will also increase, because of increasing salaries and health care costs.
Director Russ Spicuzza noted the district spends about 77% of its budget on salaries and benefits, which he said is too high.
“We need to talk about it. At some point we have to address that number,” he said.
The board is expected to adopt a final budget for 2020-21 June 23.