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UPSD Property Owners Facing Significant Tax Increase
Written by Badley Schlegel, Staff Writer

            Residents in the Upper Perkiomen School District are facing a significant property tax hike. Board members will determine the size of that increase. Last week, the Finance Committee discussed its options to cover a $3.7 million budget gap as part of a budget for the 2020-21 school year.

            The average property owner in Montgomery County is guaranteed to face at least a tax increase of more than $136. That figure could increase to more than $265. Landowners in Berks County are looking at a similar hike of more than $107 with a ceiling of over $209, according to information provided by Sandra Kassel, the district's business administrator.

            "We have to make some tough decisions," said Raeann Hofkin, the school board President, during the April 30 meeting.

            According to Kassel, the full school board will consider a motion to approve a preliminary budget – which totaled $37.482 million – with a tax increase. The members will have to decide the extent of the hike prior to the vote at tonight's regular meeting. They could adjust that figure before final budget approval in June.

            "I hope we are all at zero," wrote Melanie Cunningham, a board member and chair of the committee, in an email message received Friday, May 1.

            Administrators started the budget process for the upcoming school year with a significant deficit. Increases in contract services ($1.16 million), salaries ($1.045 million), debt service ($610,000), retirement ($418,000) and purchasing services account for the additional expenses.

            Revenue shortfalls related to COVID-19 accounted for $1.2 million a projected revenue gap. Kassel identified decreases in real estate transfer tax, EITC and interest earnings.

            During the April 30 meeting hosted on Zoom, Kassel presented the three-person committee – as well as several other participating board members – with $1.355 million in expenditure reductions. They included $773,134 in department costs, $518,247 in staff costs and $63,397 from the building budget.

            According to Kassel, administrators will continue to examine the budget for ways to save money. Keith McCarrick, a committee member, suggested that the board be as conservative as possible with its estimates.

            "We'll continue to dig in before the next meeting," Superintendent Allyn Roche said.

            Property owners are guaranteed to face a 3.48 percent tax increase due to a ratio determined by the State Tax Equalization Board, whose primary function is to determine the aggregate market value of taxable real property in each political subdivision and school district throughout Pennsylvania. In Montgomery County, the median assessed value for a property previously assessed at $128,880 will owe an additional $136.04. In Berks County, the median assessed value for a property previously assessed at $101,500 would owe an additional $107.14.

            An extra tax hike, permitted within the Act 1 index, might also be necessary. Without any additional increases, district officials would need to transfer $2.425 million from its reserve fund to balance the budget, according to a chart in the presentation.

            A one percent hike would generate an additional $373,547 in revenue. At two percent, the total increases to $747,094. At three percent, the number is expected to exceed $1.120 million. At the peak proposed rate of 3.2 percent, the amount hits $1.234 million.

            The proposed department reductions include $276,418 from technology, $189,964 from pupil services and special education, $182,200 from facilities, $74,552 from the Western Center, $26,500 from transportation, $13,200 from athletics, $9,000 from curriculum and instruction and $1,300 from human resources.

            Board Member Judith Maginnis expressed concerns about cutting technology funds since the district might be forced to continue at-home learning in the fall. McCarrick suggested that the board consider a one-time cancelation of fall sports if the season is called off by issues related to the coronavirus.

            "We have to look at every single thing, including all the programs," board member Peg Pennepacker said. "We need to pull out all the stops and think outside the box."

            Classroom program reduction could lead to increased class size, according to Roche. He said he was prepared to advocate for the students by maintaining the staff and programs at the proposed level.

            The proposed personnel savings would be created by not replacing two reading specialists ($220,021), not replacing a retiring professional employee ($156,172) and deferring the contracting of a network administrator ($142,054).

            The reductions from the building budgets include $29,250 from the high school, $15,000 from the middle school, $7,173 from the 4th & 5th Grade Center,  $7,050 from Hereford Elementary and $5,224 from Marlborough Elementary.





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