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Corbett budget 'blindsided' school districts

Brian C. Rittmeyer
| Saturday, March 12, 2011

Seeking an exception to the state's limits on how much school districts can increase property taxes would have made things easier in light of proposed state spending cuts on education, says Kiski Area school board President Robert Keibler.

But the district, like all others, had to decide in January whether it would live within the inflation-related index set by the state's property tax reform law, Act 1 of 2006, or seek exceptions that would allow a higher increase without voter approval in the May primary election.

Gov. Tom Corbett presented his proposed budget -- cutting about $1 billion from education spending -- this week.

In the Alle-Kiski Valley, 10 of 14 school boards made the decision to not increase their taxes beyond their inflation-related index. Indexes ranged from the statewide base rate of 1.4 percent, the lowest ever, to a high of 2.1 percent.

Kiski Area stands to lose about $2.4 million in state funding but can increase its property tax by no more than 1.9 percent.

"We made that decision based on what we knew at the time," Keibler said. "I guess you could say we got blindsided with the budget."

Districts had to pass resolutions stating they would not raise taxes beyond their index by Jan. 27.

In districts seeking exceptions, boards had to pass preliminary budgets by Feb. 16.

Decisions on exceptions for the four local school districts that sought them will come by March 23.

If history is a guide, districts seeking exceptions almost certainly will get them, enabling the boards to enact property tax increases that exceed the cap -- without voter approval.

There are 10 reasons for which districts can seek exceptions.

The most commonly used ones give allowances for increased special education or retirement costs, decreased tax revenues and construction projects.

Last year, 133 school districts requested one or more exceptions. The state granted at least one to all of them.

"Act 1 is set up where, if you meet these conditions, the state approves them," said Timothy Kelsey, a professor of agricultural economics at Penn State University, who has researched local tax issues.

Greg Primm, president of the Apollo-Ridge School Board, says he has no regrets about not seeking an exception, although his district would get $1.2 million less from the state under Corbett's plan.

"We have to make decisions based on what we know. We didn't know what the (state) budget was going to look like," Primm said. "We'll have to make it work.

"I have to believe there's going to be some tweaking of these numbers before there's a final (state) budget adopted," he said. "Hopefully that will be to our favor. If not, we've got to assess what our shortfall is going to be and try to deal with it the best we can."

There has been talk among some school district superintendents of asking the state to reopen the window for applying for exceptions, but New Kensington-Arnold Superintendent George Batterson said he was not aware of any organized movement to pursue that or of anyone approaching the state.

Representatives of the state Department of Education and Corbett's office did not return calls for comment on allowing districts to revisit their exception decisions.

In his budget address, Corbett said he would want any school property tax increase that exceeds inflation to be decided by voters. He made no mention of allowing exceptions.

Only about a dozen districts have held referendums on tax increases, said David Davare, research director of the Pennsylvania School Boards Association.

Of those, not one has passed.

New Kensington-Arnold is facing an approximately $2 million reduction in state funding. The board chose not to seek an exception.

"The board wants to not increase taxes," Batterson said. He called the district's budget situation "horrible."

"We're going to be in the news," Batterson said. "I have to cut all kinds of programs and staff."

South Butler County would be able to weather a proposed $1.2 million cut in state funding through "smart fiscal decisions" and more tax money coming in from the Victory Road business park in Clinton Township, district spokesman Jason Davidek said.

South Butler did not seek an exception.

"We're confident we'll be able to put together a balanced budget using these proposals as an initial base line," Davidek said.

Brian Rittmeyer can be reached at brittmeyer@tribweb.com. Amy Crawford of the Tribune-Review in Greensburg contributed to this report.

Exceptions

Here's what Alle-Kiski Valley school districts decided to do on seeking exceptions from the state to raise property taxes higher than their inflation index:

Seeking exceptions: Franklin Regional, Freeport Area, Highlands and Riverview.

Not seeking exceptions: Allegheny Valley, Apollo-Ridge, Armstrong, Burrell, Deer Lakes, Fox Chapel Area, Kiski Area, Leechburg Area, New Kensington-Arnold and South Butler. Source: Pennsylvania Department of Education

State budget impact

Gov. Tom Corbett's proposed budget would cut more than $1 billion in funding from schools. Here is how much less districts would get in the 2011-12 school year compared to the current school year, according to the Pennsylvania State Education Association:

• Allegheny Valley: $380,797

• Apollo-Ridge: $1.2 million

• Armstrong: $4.4 million

• Burrell: $929,081

• Deer Lakes: $899,907

• Fox Chapel: $546,131

• Franklin Regional: $1.9 million

• Freeport Area: $936,026

• Highlands: $1.7 million

• Kiski Area: $2.4 million

• Leechburg Area: $634,611

• New Kensington-Arnold: $2 million

• Plum Borough: $1.9 million

• Riverview: $445,714

• South Butler County: $1.2 million

Source: Pennsylvania State Education Association

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