Carlisle school board leans toward a 2% tax hike for next year

Apr. 10—Carlisle Area School Board members are leaning toward a 2% tax increase as part of a strategy to close a projected $5.95 million gap in its budget for 2021-22.

Board members Thursday reviewed two alternatives to the proposed 2% hike that district administrators have recommended to bridge the gap between $95,376,000 in expenditures and $89,423,000 in revenue.

The alternatives call for either no tax increase or a 1% tax increase. None of the options currently on the table approach the maximum 3.9% increase allowed under Act 1.

While several board members spoke out Thursday in support of the 2% hike, they are still a month away from taking any official action. A vote on preliminary budget approval is scheduled for May 13 with a vote on final adoption scheduled for June 17.

If approved, the 2% hike would increase the tax rate from 15.3528 to 15.6598 mills. Property owners would pay about $1,565.98 on every $100,000 of assessed property value or $30.70 more than the current year. The tax hike would generate about $985,000 in new revenue.

To help close the remaining gap in the budget, district administrators are recommending that the board draw down $2,761,000 in savings from three categories of fund balance.

In March, board member Rick Coplen asked the administration to return this month with alternatives that draw more money from reserves to allow for a lower tax increase.

During a finance committee meeting Thursday, Business Manager Jenna Kinsler presented an overview of how the recommended 2% option compares to options that call for a 1% tax hike and no tax increase.

All three options include a projection of an additional $500,000 in Earned Income Tax revenue that was not factored into the March budget presentation.

In addition, all three options include the one-time use of $1,707,000 in federal COVID relief grant funding to upgrade the district's cyber academy next school year.

While the 2% option would require the drawdown of $2.76 million from reserves, the 1% option would require a drawdown of $3.26 million while the no tax increase option would require a drawdown of $3.75 million.

The administration is recommending a 2% tax hike because it was felt that the 3.9% maximum would be too heavy a burden on district families suffering hardship from the economic aftermath of COVID-19, Kinsler said.

Board member Anne Lauritzen agreed. "The 2% is a fair landing point," she said. "It's manageable for us and takes into consideration the families that are hard hit."

Board President Paula Bussard sees the 2% option as a balanced approach that eases the burden on district families while keeping savings intact to serve as a future buffer.

"We need to be mindful that we are not only using the reserve, but one-time funding for this budget," Bussard said. "One of our goals is to strengthen our financial planning. We need to be cautious. I think the 2% is better."

Looking at the options, Coplen agreed saying a deeper drawdown from savings would reduce the ability of the district to borrow money at a lower rate. The 2% option provides flexibility going forward, Coplen said.

Email Joseph Cress at jcress@cumberlink.com.

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