Oxford Area School District proposes larger tax increase to cover budget shortfalls04/25/2021 07:07PM ● By Steven Hoffman
After keeping tax increases at a minimum—one-percent or less—for five straight years, the Oxford Area School District will likely need a larger tax increase to balance the budget for 2021-2022.
District officials said at an April 20 school board meeting that a 4.2 percent tax increase is under consideration as work continues on the spending plan for the next fiscal year. The school board approved a proposed final budget at the meeting, and is expected to adopt a final budget next month. Pennsylvania school districts are required to approve their budgets and set the new millage rates by June 30 each year.
District officials pointed to budget shortfalls as the reason why a larger tax increase will be necessary this year.
“Our budget shortfalls are looking severe,” said school board member Robert Tenga, who serves on the district's Finance and Budget Committee.
The school district has been dipping into its fund balance each year to balance the annual budget, and after years of doing that, the district is now in a position where it will need to boost revenues to offset the increases in expenditures. District officials want to work toward being able to balance the budget without utilizing the fund balance by the 2025-2026 school year so that Oxford doesn’t end up in a precarious financial position.
District officials pointed out that a larger tax increase was avoided last year, at the height of the pandemic, by utilizing money from the fund balance, but it would be irresponsible to continue to do that.
Brian Cooney, the district’s business administrator, said that a tax increase at 4.2 percent, which is Oxford’s adjusted Act 1 Index limit, would bring in about $1.6 million in revenues. That’s not enough to cover all the year-to-year expenditure increases, but it will reduce how much of the fund balance gets used up this year.
Superintendent David Woods said that the Public School Employees' Retirement System (PSERS) costs, as well as expenses related to special education and charter schools, are the three line items that are impacting the budget the most.
“We have almost zero control over those three cost drivers,” Woods said.
Several school board members talked about how Oxford’s budget is much less than those of neighboring school districts, so the need for a tax increase is not a result of unnecessary spending. School board member Mark Patterson pointed out that Oxford’s budget is in the range of $73 million, while other school districts in the area have budgets that exceed $90 million.
Tenga said that Oxford’s tax increases of less than one-percent per year during the last five years compare favorably to the tax increases by other school districts in the area during that same time period when, he said, only one other district had an average tax increase of under two-percent.
Ultimately, the school board approved the proposed final budget, 7-2. School board president Joseph Tighe said that he did not support a tax increase of 4.2 percent as he voted against the motion.
If the school district does adopt a final budget with a 4.2 percent tax increase, the average taxpayer’s bill would rise by $172.
In other business, the school board discussed a large project that is being planned to update the heating and cooling systems in the Jordan Bank School, the Nottingham School, and Elk Ridge. The school board approved a contract totaling $2,526,193 with the McClure Company. Cooney explained that the systems in the older buildings had not been updated during the last 30 years, and the district has known for some time that improvements were going to be needed. Elk Ridge will need less work than the other two buildings because the air conditioning systems were upgraded several years ago when the system stopped working.
There are some positive aspects to the project. First, Oxford is taking advantage of some one-time funding. The school district has received pandemic relief grants totaling about $3.2 million, and some of that money can be used for facilities upgrades like this. Additionally, once the upgrades are made, Oxford will see a reduction in its energy costs each year.
The school board approved a new contract for Dr. Margaret Billings-Jones, the district’s assistant superintendent. The new contract begins on July 1 and extends through June 30, 2025. Billings-Jones has been with the school district since July of 2013. Her contract extension comes just a month after the school board also finalized a new contract with Woods, who also joined the district in 2013. Woods’ pact also extends through June 30, 2025.
In her report to the school board, Billings-Jones said that the summer school program is being enhanced this year so that all students in the district can get the extra help that they need to overcome the challenges of the tumultuous 2020-2021 school year. Details about the summer course offerings can be found on the school district’s website.
The school board’s next work session will take place on Tuesday,May 11. A regular meeting will take place on Tuesday, May 18. Both meetings begin at 7 p.m.