School district budget roller coaster

By on May 4, 2016

Tax increase on the table, but not definite

A lot can happen between now and final approval in June

With the final 2016-17 Warwick School District budget set to be voted on in June, business manager Nathan Wertsch updated the school board at the May 3 committee of the whole meeting.

As it stands now, budget expenses for 2016-17 are being projected at $71,253,678, while revenue is at $67,755,851. That leaves a possible budget deficit of $3,497,827. The school district has a fund balance of $10,846,994, which could be used to cover the deficit, leaving a fund balance of $7,349,167.

“While the proposed final budget shows a current deficit of $3.5 million, I fully expect that number to be materially less between now and the final adopted budget. The district has a number of viable options that we are exploring at this time,” Wertsch said.

Some of that hinges on the state budget, which Wertsch referred to as a roller coaster, which in turn creates a local roller coaster.

“Governor Wolf has requested a $200 million increase in his 2016-17 budget, to be distributed by the Fair Funding Formula,” said Wertsch, adding that could be favorable to the Warwick School District.

In Wolf’s method versus the Basic Education Funding Commission, the “winners” in Pennsylvania are mostly in more urban areas, such as Philadelphia, Coatesville and Bethlehem. In Lancaster County, only Columbia is a “winner.” Warwick School District would not benefit, nor would most of the other school districts in the county.

Reduced enrollment is a trend in the Warwick School District, which was first noticed in the elementary grades, and is now filtering into the secondary grades.

“Since the start of the 2015-16 school year, our enrollment has declined by 42 students,” Wertsch said. “We anticipate enrollment to continue to decline.”

Enrollment in 2007 was 4,739. In 2016, it has dropped to 4,180, which represents a decline of 559 students in nine years.

Pupil spending trends have shown an increase of eight percent, with $14,975 spent on each student. That puts pupil spending on a mid-range, with some school districts spending as much as $17,625 and others as little as $12,679.

Warwick School District taxpayers had a 0.592 millage rate increase last year. For the 2016-17 school year, they are looking at a 20.1627 millage rate.

“The proposed final budget includes a tax increase within our 2.9 percent index,” Wertsch said. “The median assessed value of a home in our district is $146,600, which would mean a tax increase of $85.72.”

A few budget considerations include the possibility of real estate tax revenue getting a boost from community housing and building projects, state funding revenue, bond refinancing, and exploring health insurance plan design changes.

“The district does still have funds committed for the PSERS (Public School Employees’ Retirement System) rate stabilization, as well as the projected operating deficit, so those will be utilized to mitigate the exposure next year,” Wertsch explained. “Any remaining deficit will be able to be covered by the fund balance.”

He added, “It’s because of all of these moving pieces that I fully expect the final budget to be materially different from the proposed final budget.”

The proposed final budget will be presented for approval at the May 17 school board meeting, with notice to adopt the final budget no later than June 11. The final budget will then be presented for adoption at the June 21 board meeting.

Laura Knowles is a freelance reporter who covers the Warwick School Board beat for the Record Express. She welcomes reader feedback at lknowles21@gmail.com.

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