Carlisle school board members defend tax increase to preserve education programs

May 15--Citing the economic fallout from the COVID-19 pandemic, a Carlisle resident Thursday called on the local school board to make deeper cuts to staffing instead of increasing the real estate tax by 3% next year.

"I get it that we're in a crisis, but to put the burden on the property owner," Gary Grant said. "Many homeowners and business owners are trying to navigate through this. We don't know when this crisis is going to be over."

While board members expressed sympathy for the plight of many in the community, they didn't budge on the need to keep education programs intact. They voted unanimously to advertise a proposed $86.9 million budget for 2020-21 that raises the tax rate from the current 14.9057 mills to 15.3528 mills.

"While the proposed increase may seem tone deaf with so many people struggling in the environment, I think part of doing the right thing for the community is maintaining a sound education system," said Bruce Clash, chairman of the board's finance committee. "Not having it has consequences of its own including a loss of property values and a lower quality education. It would make Carlisle less desirable for businesses and for people.

"Education is a social pillar, a foundation of a civilized and productive society," Clash said. "It's an investment in human capital that I believe should not take a dramatic hit. Some things need to be spared."

Tax hike headaches

The board is set to vote June 18 on final budget adoption and the 3% increase. If the tax hike is approved, property owners would pay $1,535.28 on every $100,000 of assessed property value or $44.71 more than the current school year.

"I know this will sound callous, for what amounts to $100,000, the property owner would be paying [an additional] $3.73 each month," Clash said. He acknowledged that even that amount may be challenging for some taxpayers.

If approved, the tax hike would generate $1,436,000 in additional revenue that would be used to offset a projected $4,455,217 budget shortfall for 2020-21. In early March, Carlisle Area School District was looking at a projected deficit for next year of around $1.7 million. In only two months, this estimate more than doubled to the current projected shortfall due to the anticipated fallout from COVID-19 that includes a 20% loss of Earned Income Tax revenue or $1.8 million.

School districts statewide are looking at a projected loss of revenue of $800 million to $1 billion next year with the prospect of even worse conditions in 2021-22, Clash said. In the last six weeks, the COVID-19 crisis has caused declining economic metrics that took 18 months to three years to achieve during the Great Recession that started in 2008, he said.

Board member Anne Lauritzen said the $1.7 million shortfall the district faced in early March was the smallest budget gap in a long time. This was due to the board and administration making difficult decisions and significant adjustments in recent years to contain rising costs, Lauritzen said.

"This could have been worse," she said.

The problem with not raising taxes this year is that the $1.4 million in needed lost revenue would carry over into next year, Clash said.

"We won't have that foundation," he said. "The problem compounds itself."

The school board and administrators have virtually no control over such major cost drivers as special education, charter schools, health insurance and the annual contribution to the state retirement system, he said. Such costs are growing at rates faster than any increases the state makes to education subsidies to account for inflation, Clash said.

Board member Gerald Eby said the state has been gradually decreasing its overall share of public education funding.

"Our tax increases over the past several years have been basically replacing what the state takes away," Eby said. "I'm sorry to have to raise taxes, but we're just trying to break even. If you have an issue with taxes being raised, you need to talk to the folks [state legislators] in Harrisburg."

A balanced approach

The 3% tax increase is part of a broader fiscal strategy to offset the projected $4.45 million budget shortfall. Administrators have recommended that the board cut four support staff positions for an estimated savings of $238,000 and the equivalent of two full-time teacher positions for a savings of $160,000.

Rather than resort to furloughs, the hope is that the district could cut the six positions through attrition by not hiring replacements for staff members who resign or retire, Superintendent Christina Spielbauer said.

"We're working through that," she said. "I'm not at a place where I can tell you what the positions are."

To determine staffing levels, the district each budget cycle reviews student enrollment at each grade level along with student interest in secondary school courses, Spielbauer said. The review this year determined that more support was needed for a growing population of special education students, so money for additional staff is built into the budget for 2020-21.

Beyond the cuts, administrators recommend a reduction in the proposed salary hike for Act 93 and support staff employees from 3.2% to 2% for a total savings of $142,465.

Act 93 employees are building principals, department chairs and higher-level central office administrators excluding Spielbauer and Assistant Superintendent Colleen Friend. Spielbauer and Friend will not get a salary increase at all next year for a savings of about $10,000. Support staff employees include central office secretaries, building custodians and other maintenance staff.

To further balance the budget, administrators recommend using about $1.8 million in capital reserves to pay the debt service payment that is due Sept. 1.

Administrators in December presented a wish-list of about $3.48 million in facilities and technology improvements planned for the 2020-21 fiscal year. Now, over half of that money is going to paying off the debt service on past school projects.

"We wanted to keep the use of the fund balance in the general fund to a minimum as much as possible," said Jenna Kinsler, business manager. "Once money is transferred to the capital reserve, it cannot be transferred back to the general fund, but it can be used to pay off debt service."

Administrators suggest using $369,000 in the unassigned fund balance to shore up the general fund, Kinsler said. The district could also expect another $300,000 in savings next year resulting from renegotiated contracts for commercial insurance, lawn care, copier service and accounting software, she said.

Board member Rick Coplen called the fiscal strategy "a reasonable balanced approach" to closing the budget shortfall.

"It's painful for all of us to raise taxes," Coplen said, referring to the board. "Yet it does what must be done to continue our high quality public education."

School and municipal government budgets not only reflect the values, but priorities of the community, Coplen said.

"What we are saying with this budget is we in Carlisle put public education at the absolute top of our priority list," he said. "Therefore, we are willing to make the sacrifices that we see in the budget. We would prefer not to do any of those things but we have to make sure our students have a top quality education."

As finance committee chairman, Clash argued against any further use of savings to shore up the projected shortfall.

"We are already proposing to spend over $2.2 million of those reserves," Clash said. "That's almost 20%. With such uncertainty ahead, I don't think it's wise to spend more out of reserves."

Email Joseph Cress at [email protected].

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