Oxford School Board discusses 2015-2016 budget
01/19/2015 04:12PM ● Published by Steven Hoffman
A month after early details of a $64 million spending plan for the 2015-2016 school year were unveiled, the Oxford School Board continued to discuss the budget at its Jan. 13 work session.
Business administrator Charles Lewis, Jr. prefaced the update on the budget by explaining that the board is at the point in the budgeting process where a decision has to be made regarding whether the district will approve an opt-out option that would require the district to stay within the Act 1 limit for tax increases.
The Act 1 Index limit for next year is 1.9 percent across Pennsylvania. Oxford’s adjusted Act 1 index limit is 2.6 percent, although there are also some exceptions that the district could qualify for. Voting to stay within the Act 1 limit would remove some time constraints that the district faces because it means that the budget plan would not need to be approved by referendum.
Lewis said that it is the Finance Committee’s recommendation is to approve the opt out resolution.
“This is the same action that we’ve taken since Act 1 has been in existence,” Lewis said.
Lewis explained that expenditures are projected to be $64,006,568 for 2015-2016, which is an increase of $3,117,878 over the current budget’s expenditures of $60,888,690. That amounts to a spending increase of about 5.12 percent.
Several items account for most of the year-to-year spending increases, including the district’s state-mandated contribution to the Pennsylvania Public School Employee Retirement System (PSERS), employee salaries, transportation costs, and tuition payments to charter schools.
The PSERS contribution is going up $1,001,796, a hike of more than 22 percent. School districts across the state have been seeing large increases in the PSERS contributions in recent 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.
Tuition to the Technical College High School is projected to go up by $342,079, an increase of about 20 percent. Lewis said that the programs offered by the Technical College High School have proven to be popular with students, so the district’s costs continue to climb.
Oxford is also seeing tuition costs to charter schools rise by $273,794. Salaries for district employees are projected to increase $262,157, and health care costs are expected to climb by $253,479.
Transportation costs are also going up—in part because the district is adding electronic cameras to each bus.
Lewis noted that by the time the district is ready to approve a final budget, the fuel costs could be less than what was budgeted because of falling gasoline prices. Declines like these could help the district close the budget gap.
The school district anticipates that revenues will go up from one year to the next. Oxford expects to collect about $286,589 more in real estate taxes next year than this year, and that's with the tax rate remaining the same. Other local revenues are expected to climb by approximately $146,113.
A missing piece to the budgeting puzzle is the state subsidy that the district will receive. The district is anticipating that the state subsidy won’t decline, but until new governor Tom Wolf unveils his first preliminary budget there will be uncertainty about those projections.
If the district increased taxes by 2.6 percent, the maximum allowable amount, that would generate approximately $850,380 in additional revenues. A 2.6 percent increase would equate to .7860 mills. The current millage rate stands at 30.2324 mills.
Even with the tax increase, the district would still need to take money from its fund balance and also find additional cost-savings between now and the time the spending plan is adopted in May or June to balance the budget.
The school board will meet again next month on Feb. 10 and Feb. 17. Both meetings take place at the Hopewell Elementary School at 7 p.m.