By Neil A. Sheehan
NETHER PROVIDENCE >> Groundhog Day will roll around again on Feb. 2, but those paying attention to a vote by the Wallingford-Swarthmore School Board on Monday, Jan. 27, may also have a sense of déjà vu.
At a meeting that evening, the board will be asked to approve a proposed preliminary budget for the 2020-21 fiscal year that begins July 1.
There will be other approvals needed prior to the spending plan’s anticipated final adoption on June 22. However, the decision on Jan. 27, if in favor, will lock in two key parameters: The projected tax increase will not exceed the state’s Act 1 index for the district of 2.6 percent and the district will once again take an exception – this time for 0.8 percent -- for special education costs allowed by the state.
The net effect will be a proposed tax hike of 3.4 percent, generating roughly $2.21 million in new revenues.
For the current fiscal year, the boost in taxes was pegged at 3.2 percent, based on a slightly different formula. Wallingford-Swarthmore adhered to the Act 1 index for 2019-20 of 2.3 percent and took a special education exception of 0.9 percent.
That translated into an additional $260 in school taxes for a home assessed at the district average of $179,000 and $549 more for one assessed at $337,000. The respective overall school tax bills were $8,109 and $17,079.
Business Administrator Martha Kew provided details at the board’s latest meeting. It was her fourth time rolling out the district’s budget roadmap for the upcoming fiscal year.
And as in previous years, Kew devoted much of her time to the way in which the district’s hands are tied due to costs over which it has no control, notably its required contributions to the state retirement system for teachers.
For FY 2020-21, Wallingford-Swarthmore will shell out $200,000 more to the Pennsylvania School Employees Retirement System, or PSERS, as its contribution rate rises from 34.29 to 34.51 percent.
While the growth rate has slowed, “it has been a dozen years since pension growth was anywhere near the ’09-’10 growth rate of .4 percent,” she said.
To put those numbers in starker terms, Kew said, “In slightly over a decade, the pension employer contribution rate has increased over 600 percent.”
Even though the district receives back about 17 cents on the dollar from the state in reimbursement, the amount it must pay out represents just under 40 percent of its budget outlays.
“That’s quite a number,” she said.
As a result of initial costs, pension reforms approved by the state Legislature are not expected to start to yield savings for districts until 2034-35.
With respect to special education costs, Kew said they have increased by more than 40 percent.
Wallingford-Swarthmore relies on local revenues to cover about 80 percent of its budget. State revenues handle about 20 percent while federal subsidies make up less than one-half of 1 percent.
Kew pointed out that the district, which is home to a limited number of commercial properties – most notaby downtown Swarthmore - is number one in the county for its reliance on residential property taxes.
“We do not have land for growth,” she said.
In order to balance its budget, the district plans to tap $916,000 from its fund balance, or reserves, though that number could fall as revenue and costs projections are refined. At the conclusion of FY 2018-19, the district had about $9 million in reserves.
Board President David Grande urged district taxpayers to contact their legislators for changes to school funding.
“At the same time, it’s important to say that despite these pressures the district continues to thrive in so many ways,” he said.