The Oxford School Board got its first public look at the next budget on Dec. 16 as assistant business administrator Penny Shaffer offered an overview of the 2015-2016 spending plan as it stands at this early stage.

Shaffer explained that expenditures are projected to be $64,006,568, an increase of $3,117,878 over the current budget’s level of $60,888,690. That amounts to a spending increase of about 5.12 percent.

Shaffer then explained some of the items that are having the largest impact on the budget. The district’s state-mandated contribution to the Pennsylvania Public School Employee Retirement System (PSERS) is going up $1,001,796, a hike of more than 22 percent. School districts across the state have been seeing whopping increases in the PSERS contributions for the last five years. In Oxford, for example, the retirement obligations have increased over the last five years from $1,733,643 to $2,544,843 to $3,571,672 to $4,534,048, to a projected $5,535,844 for the 2015-2016 school year. An act by the State Legislature more than a decade ago raised the pension rates for state employees and public school employees without a dedicated source of funding to support the increase.

Oxford is also seeing increases in other expenditures from one year to the next.

Tuition to the Technical College High School is projected to go up by $342,079, while tuition to charter schools is going up $273,794. Salaries for district employees are projected to increase $262,157, and health care costs are expected to climb by $253,479.

Overall, Shaffer said, the anticipated increases in expenditures amount to $3,117,878.

That's the bad news. There is some good news, too.

The school district anticipates that revenues are going up from one year to the next. The district expects to collect about $286,589 more in real estate taxes next year than this year, and that's with the tax rate remaining constant. Other local revenues are expected to climb by approximately $146,113.

The district currently receives approximately $20 million annually from the state. Gov.-elect Tom Wolf will have some additional time to prepare his first budget so school districts won't have a clearer picture of the basic education subsidy until the spring. Shaffer said that right now district officials are expecting the basic education subsidy from the state to remain fairly consistent. Overall, subsidies from the state are expected to increase by a projected $862,674.

Add it all up and the district expects to have an increase in revenues—if the tax rate remains constant—of approximately $1,422,855.

It's still early in the budgeting process, but with projected expenditures out-pacing the anticipated revenues, a tax increase could be in the offing.

The Act 1 Index limit that restricts how much a Pennsylvania school district can raise taxes without seeking approval from residents is set at 1.9 percent for 2015-2016. Oxford's adjusted Act 1 index limit is 2.6 percent. If the district increased taxes by 2.6 percent, Shaffer said, that would bring in approximately $850,380 in additional revenues. The district would still need to find additional cost-savings between now and the time the final budget is adopted in May or June or dip into the fund balance to balance the budget.

Shaffer explained that the district must either adopt a preliminary budget by Feb. 18, 2015—90 days before the Primary Election—or pass an opt-out resolution by Jan. 29. The opt-out would declare that the district does not intend to exceed the Act 1 limit on the tax increase for the next year. Shaffer said that the Finance & Budget Committee Recommendation is to have the board adopt the opt-out resolution at the meeting on Jan. 20 and the district will stay under the Act 1 Index of 2.6 percent.

A 2.6 percent increase would equate to .7860 mills. The current millage rate stands at 30.2324 mills.

In his Chester County School boards Legislative Council report, school board vice president Richard Orpneck noted that the state is facing a projected budget shortfall of nearly $2 billion as new governor Tom Wolf prepares to take office.

Orpneck explained that the school district is optimistic that state lawmakers will find a way to maintain education funding at the current levels, the situation bears watching.

“The new governor will have his challenges in front of him,” Orpneck said.