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Despite losses, Pennridge will not hike real estate tax

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No one can predict how much revenue the Pennridge School District will lose in next year’s budget due to the lingering effects of the COVID-19 pandemic.

But one thing is certain – for the fourth year in a row property owners will not face a real estate tax increase.

“We will not balance this budget on the backs of our taxpayers,” said School Board President Bill Krause at the start of Monday night’s virtual meeting.

A few minutes later, Business Manager Sean Daubert painted a grim picture of the financial challenges facing the district now, next year, and into the future. “The 20-21 budget has presented the most unique set of challenges that I have witnessed in my career so far,” he said.

Daubert told the board he expects precipitously declining local revenue from the earned income tax, local services tax, real estate transfer tax, and interest income while expressing reservations about the state’s ability to support public education at current funding levels. Rising unemployment – 3,779 district residents filed for benefits between March 1 and April 21 – and an extended stay-at-home order “could have devastating effects on the district’s finances,” he said.

This year alone, Daubert said, the district is expected to fall about $900,000 short of projected local revenue, even as it continues to pay all employees their full salaries and benefits through the end of the school year as required by state law. What happens in the 2020-21 spending plan and beyond is only conjecture, he said.

A prolonged shutdown of the economy would drag these negative impacts into 2020-21 and possibly into the 2021-22 fiscal year, potentially spreading the impact to real estate revenue, which accounts for 78 percent of all district revenue, he said.

While the state has pledged to fulfill its financial responsibility to districts this year, it is also facing a $4 billion budget shortfall, said Daubert, “which not only makes us wary of the small increases included in the governor’s 2020-21 budget request, it also causes great concern for the state’s ability to maintain future funding at the current year level.”

Despite the revenue uncertainty, the $143.8 million spending plan on the table includes a 1.62% increase in expenditures, mainly for contracted salary and benefit increases ($2 million), retirement contributions ($1.3 million), the Upper Bucks Technical School ($510,000), Intermediate Unit services ($474,000), new positions ($455,000) and Social Security ($151,000).

Since the shutdown in March, Daubert and his team have trimmed about $2.6 million in projected expenses “with no reductions at the classroom level, having no impact on learning.” The savings were accomplished by eliminating some expenditures, reducing others and postponing some equipment purchases, he said.

The budget currently included a shortfall of less than $100,000 but that is based on revenue projections made before the shutdown.

Krause said the board and administration will continue to monitor the economic impact to the district and the community and to provide an update at the next Finance Committee on May 5.

“We fully recognize the stresses that many of our friends and neighbors are feeling,” he said.


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