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Oxford schools facing $4.6 million budget shortfall

12/26/2013 10:22AM, Published by ACL, Categories: Schools



By Steven Hoffman

Staff Writer

The Oxford School Board discussed the 2014-2015 budget for the first time on Dec. 19, with business administrator Charles Lewis and assistant administrator Penny Shaffer making a presentation to the school board that was more detailed than normal because three new board members—Lorraine Bell, Richard Orpneck, and Joseph Starcheski—are taking part in their first budget process.

The presentation made it clear that there is some challenging work ahead to overcome what amounts to a $4.6 million budget shortfall for the 2014-2015 school year.

Lewis offered up some good news early in the presentation. He said that even if the tax rate remains at 30.0502 mills for another year, there should be a net increase in real estate tax revenue of $76,705. This is significant because Oxford and many other school districts have been seeing year-to-year decreases in real estate tax revenue because large numbers of homeowners have been seeking reassessments. Having even a slight increase is a positive development. The district is also projected to see a $86,803 increase in other local revenue, largely derived from the earned-income tax. Oxford has a projected an increase in state subsidies of $296,987.

These revenue increases are offset somewhat by a projected decrease in federal subsidies by $91,709. So from those four revenue sources, there is a projected increase in revenues of $368,786.

Lewis noted, however, that these revenue increases aren’t nearly enough to balance the expenses that are projected to rise in the next fiscal year.

The single largest hike will be in the district's Pennsylvania Public School Employee Retirement System (PSERS) contribution, which is going from $3,572,000 to $4,534,000—an increase of $962,376.

The district's costs for students' tuition at the Technical College High School is going from $1,354,451 to $1,710,396, an increase of $355,945. This tuition hike is attributed to the fact that more Oxford students are enrolling in classes at the Technical College High School. Four years ago, the figure was 55 students, and now there are 86 students.

The district also expects to be paying more in tuition to charter schools. Lewis said that the district is budgeting $5,786,956 for the tuition for 544 students who either attend the Avon Grove Charter School or are enrolled in a cyber charter school. That's a $329,460 increase over the current year's levels.

Additionally, health care costs ($300,071), special education costs ($301,087), and the transportation costs ($192,354) are also expected to rise by significant amounts. Oxford's debt service payments will also spike by $185,412.

Overall, Lewis said, there are $61,570,717 in expected expenditures compared to $58,910, 900 for the current year. That's an increase of about $2,659,817, or slightly more than 5 percent.

Lewis said that projected expenditures will exceed the projected revenues by $4,620,428.

While there will be a lot of work on the budget between now and the time it is formally adopted, one thing is clear: the district won't be able to raise taxes enough to balance the budget unless the school board takes the highly unusual step of seeking approval for a large tax increase via referendum.

Shaffer said that Oxford’s adjusted Act 1 index for 2014-2015 is 2.9 percent. That's the maximum amount that the district could raise taxes without seeking voter approval.

Lewis said that if the district raised taxes by 2.1 percent, it brings in $676,703. So even a 2.9 percent increase will be far short of $4.6 million, which means that the district will have to come up with a combination of revenue increases and spending cuts to balance the budget.

Noting that the State Legislature capped how much a district can raise taxes by, Lewis said, “We’re being limited by the legislature on one end and then facing mandated expenditures on the other end.”

The school board will hold a budget review meeting on Tuesday, Jan. 14. Then at the Jan. 21 meeting, the board is likely to approve the opt-out resolution that would obligate the district to stay within the Act 1 limit for this budget cycle. The deadline to pass the opt-out resolution this year is Jan. 30.

Even after the preliminary budget is adopted, officials will have several months to work out the details of the spending plan.

“Our budget is planned to be approved in May,” Lewis said.



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oxford budget oxford school board taxes technical college high school oxford school district pennsylvania public school employee retirement system act 1


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