Plum School Board agrees to keep potential tax hike to 4% or less

Plum Borough School District officials have pledged to keep any possible real estate tax hike to a minimum as they continue to work on next school year’s budget.

The board voted unanimously Jan. 26 to keep the tax rate within the Act 1 index, which is a state formula related to the local inflation rate that limits tax hikes.

The district can raise taxes as much as 4% under the index. The vote limits any tax increase to that amount, but the board could vote in coming months on a smaller tax hike — or none at all.

Joe Tommarello, board member and finance committee chairman, said the decision is a commitment “to living within our means. This is the first time that I can recall at least in over a decade that Plum has passed such a motion.”

“We are putting together a sound budget that will hopefully have no tax increases nor any cuts by the time it is finalized this summer.”

District chief financial officer John Zahorchak could not be reached for comment.

A budget presentation can be found in the “related documents” folder under the December 2020 tab of the district’s website’s meeting agendas and minutes section.

The presentation shows a “Scenario no. 3” that includes a 4% tax increase. There were no other scenarios in the presentation as of Jan. 27.

The scenario shown listed a projected surplus of about $625,000, with proposed revenues listed at a little less than $66 million and estimated expenses at about $65.35 million.

The presentation did not show how much more property owners would pay should this scenario be passed.

Board president Mike Devine credited the district’s financial strength to the work by Zahorchak and fellow administrators.

“Our job’s easy,” Devine said. “We follow their recommendations, and so far it’s worked out well for us. … Based on the projections for the next budget year, things look very promising.”

A balanced budget must be passed by the end of June.

The district did not raise taxes as part of this school year’s budget.

There was some concern about potential revenue losses due to the pandemic. However, real estate and earned income tax collections came in much better than projected.

“Things were thankfully better than what were anticipated,” Devine said.