First draft of Greensburg Salem School District budget has $1.3 million deficit

Greensburg Salem School District is facing a $1.3 million deficit in the first draft of its 2021-22 budget, though that is almost certain to change before a final budget is passed in June.

District Business Manager J.R. Dzurica, in presenting the preliminary budget to the school board this week, cautioned there still are many unknown factors.

State revenue is expected to drop next school year by about $334,000. This is because the district has nearly paid off a 2015 bond, for which it received yearly reimbursement payments from the state.

However, local revenue is expected to increase by a similar amount as the region’s economy recovers from the impact of the coronavirus pandemic. So overall projected revenue is about the same as it was in this school year’s budget.

Gov. Tom Wolf’s proposed budget includes a major increase for schools. It also would hike the personal income tax from 3.07% to 4.49% — a proposal that has drawn strenuous opposition from Republican lawmakers.

Because of the political fight over the state budget, Dzurica did not include any increase in state funding in his projection for next school year.

“There’s not a good chance of that passing,” he said.

The district’s projected $1.3 million deficit is driven by spending increases. Salaries and benefits will go up more than $765,000. This is mostly because of scheduled increases but also includes the creation of one new position — a technology coordinator for the district.

Many district employees, such as administrative assistants, support personnel and custodians, have contracts that expire in June and will need to be renegotiated.

Costs for charter schools are expected to go up $384,000 to a total of about $2.2 million.

“That’s money that is flowing out of the door, and we see no benefit from it,” Dzurica said.

The district plans to contribute about $380,000 to its capital reserve fund, which is used to pay for major maintenance and renovation projects.

The preliminary budget does not include revenue or expenses related to the CARES Act or other federal coronavirus relief initiatives, Dzurica said.

The district has an estimated $3.8 millions in its reserves.

Though the preliminary budget was presented without a tax increase, Dzurica provided the board with revenue scenarios based on several possible tax hikes. He stressed he was not advocating for or against an increase.

A hike of 0.5-mill would bring in about an additional $114,000 and cost the median household an extra $8.53 a year.

A hike of 3.5 mills would bring in close to $800,000 and cost the median household just under $60.

The school board is expected to vote on a proposed budget in May and a final budget in June.