If school districts have to approve their budgets before the state budget is complete, can’t the school districts reopen their budgets if the state funding is more than anticipated? 

June 4 – School district budgets have been in discussions recently and one of the biggest hurdles with crunching the numbers is without a completed state budget, school districts don’t know what funding they will receive. 

The districts have to guess what the numbers will be.

Chambersburg Area School District is looking at a potential 4% increase for taxpayers in next year’s budget. 

Pat Ryan of NewsTalk 103.7FM pointed out, “They’ve got it all reversed where the school districts have no idea what kind of money they’re getting. But we’re going to take a guess and we’ll shore up the guess with some additional taxes on the backs of the taxpayers here in the borough. You’re already seeing that in Waynesboro, and there’s no appetite in Harrisburg to reverse that at all.”

Attorney Clint Barkdoll predicted, “The districts will greatly underestimate the state subsidy. I would be curious to know would there be any interest in reopening the budget once the state subsidy arrives and let’s assume that it’s a materially different number than was baked into the budget. We’ve had recent examples where the state subsidy was increased that would have offset the tax increase that the district just passed, but yet, the districts never want to reopen the budget. That surplus just goes into the general fund. Interestingly, that 4% benchmark seems to be fairly consistent. That’s what Waynesboro did. It looks like that’s what Chambersburg is going to do. I’m actually seeing some other school districts in this region, including in Adams County and Cumberland County, 4% seems to be pretty much the standard that goes around.”

Michele Jansen of NewsTalk 103.7FM noted, “That’s a pretty high percentage for all the school districts, but I suppose when we think about what interest rates are doing right now, that’s not surprising.”

Ryan wondered, “What about all right, if you get a bigger, fatter number, will somebody bring it up here going you know what? Maybe we need to dial something back, maybe we revise the budget, maybe we bring numbers in line here. Do you think that’ll happen at all?”

Barkdoll said, “I’m doubtful, but that’s precisely what I mean when I talk about reopening the budget. There is a way the board could reopen the budget, and either return that money and return the mils or address the surplus that comes in, but I’ve never seen it happen. I keep some records here. I mean, year after year, and I could show someone the stats, that subsidy from the state comes in that far exceeds what was budgeted, and then it just gets baked into the budget. So the next year at this time, there’s another $1 million or $2 million that’s factored into the next year’s expenditures. It’s like a never ending cycle.”

Ryan suggested, “Well, let’s step on that gas and let’s step on that gas pedal very hard here. This is for Pennsylvania. Mr. Barkdoll has said there is a way in which to reopen the budget. That is the truth, correct?” 

“The board could do so,” Barkdoll confirmed. “Yes.” 

Ryan continued, “And the board is elected by who? The people of the borough, right?”

“Of the school district,” Barkdoll said. 

Ryan said, “So here you go. You have a way in which to do this. If you get more money than what is expected then we should demand the budget gets reopened.”

Barkdoll said, “That would be the process. My caveat would say if it’s materially more. Obviously, if it comes in at $10,000 or $50,000 more, that would not make a material difference in the budget. But my point is, if it comes in at millions more, which often is the case, well, that might be more than the tax increase was going to generate anyway and I just think from a governance or philosophical standpoint, that’s hard to justify if I’m sitting on a school board.”

Ryan said, “I will leave it in your careful hands, and I will be the one to mouth off because it’s other people’s money here and if you have the relief valves in which to provide that back to your taxpayers, who are already suffering enough, we are out here suffering, you’ve got a lot on your shoulders here, at the very least. If there’s a little wiggle room, great. But if we are talking about millions, I want to make sure that everybody understands that this is available to you Waynesboro, Greencastle, Chambersburg, Shippensburg, wherever we are right now, Mercersburg, Tuscarora, Fulton County, all of it. You have to know there are ways in which to open this up. And this has happened in years past where there have been millions more, correct?”

Barkdoll said, “Just recently. I mean, I’m familiar with a local district, they raised their millage and let’s say that the tax increase was said to raise another million dollars. Then a month later the state’s subsidy came in and the state subsidy was like $1.2 million more than had been budgeted that more than would have offset the tax increase. But nothing is done. That surplus just gets put into the general fund and everybody moves forward. I just don’t think it’s right from a governing standpoint. It’s not fair to the citizens and the taxpayers of the district.”