[June 17, 2013] South Middleton school board approves 'modest' tax increase Tweet Jun 18, 2013 (The Sentinel - McClatchy-Tribune Information Services via COMTEX) -- SOUTH MIDDLETON TWP. -- School Middleton School Board members voted 6-0 Monday to approve a final $31.1 million budget for 2013-14 that includes a .0836 mill tax increase. Citing a need to prepare for future budget deficits, the board majority agreed to increase the millage from 8.9245 to 9.0081 mills even though the budget for next year is balanced and did not require a tax hike to offset a shortfall. The owner of a home assessed at $194,200 -- the average for the district -- can expect to pay another $16.24 next year under the increase, Business Manager Rick Vensel said. Voting in favor of the increase was Board President Thomas Merlie, Treasurer Paul Slifko and members Michael Berk, Thomas Hayes, Pam Martin and Robert Winters. Vice President Shelly Capozzi and members Steven Bear and Derek Clepper were absent. Though Martin was not present at the meeting Monday, she participated in the discussion and cast her vote via Skype. The decision Monday represents a complete reversal from the 5-3 vote taken May 13 to approve a preliminary version of the 2013-2014 budget without a tax increase. Since that first vote, Hayes has urged fellow board members to approve some kind of tax increase so the district could gradually build up its base of recurring revenue to head off project deficits as high as $2.6 million in future years. Rolling budget Without a tax increase, Hayes predicted the district could face a fiscal cliff by the 2014-15 school year that could result in deep program cuts. He also lobbied the board to stick with a "rolling budget" model for 2013-14 school year. Double-digit annual increases in projected health care costs and in the district contribution to the state retirement system prompted the district to look at fiscal benchmarks beyond the traditional year-to-year budget. In planning the 2013-14 budget, South Middleton switched to a "rolling budget" model that projected revenues and expenditures out to two years at a time with the most emphasis placed on the first year. A target goal under this approach is to cover 100 percent of the projected deficit in the first year of the two-year cycle and 50 percent of the deficit in the second year. A board majority abandoned the "rolling budget" approach in May when it voted to hold the line on the property tax. The vote taken Monday reinstates the approach by generating an estimated $145,800 in additional revenue which the district can keep in reserves in 2013-14 for use in preventing a projected $800,000 deficit in the 2014-15 school year, Vensel said. Because the .0836 mill increase will carry over from year-to-year, the district can expect to raise a total of $291,600 going into the 2014-15 school year. This means the district will still have to find a way to offset a projected deficit of about $508,000 heading into the second year, Vensel said. In explaining his vote, Merlie said board members devoted considerable time and energy toward the development of goals that included the "rolling budget" approach to long-term fiscal planning. For the board to question that approach in the first year sets a bad example for district staff and faculty and a "horrible example to our students," Merlie said. Merlie said he would prefer a modest tax hike next year to gradually increase the revenue base rather than "smacking" taxpayers with a larger increase in the future. Berk said South Middleton needs to lobby state lawmakers to stop imposing unfunded mandates on school districts and find an alternative to the real estate tax to generate revenue. ___ (c)2013 The Sentinel (Carlisle, Pa.) Visit The Sentinel (Carlisle, Pa.) at www.cumberlink.com Distributed by MCT Information Services [ Back To TMCnet.com's Homepage ]