Avon Grove Taxpayers for Responsible Spending


        Citizens, Parents, and Schools working together to bring Avon Grove into the 21st Century!

October 21, 2015

Board Plans 3.1% Tax Increase

Maximum Increase Allowed without Public Referendum

The Finance Committee of the Avon Grove School Board voted to recommend that any tax increases stay below the 'Act 1' index of 3.2% so that no public referendum on tax increases will be held. If past patterns continue, the board will increase taxes 3.1% in the 2016/17 school year. If so, this would be the third tax increase in 3 years, with a total increase of 8.4% over those 3 years. Even with these tax increases, deficit spending is expected to continue as total expenses outstrip tax income. No mention was heard of any plans to control spending.

On Tuesday, October 15, the Finance Committee of Avon Grove School District met to consider several budgetary items. Business Manager Daniel Carsley reported that the 'Act 1' tax increase for 2016/17 was 3.2%. Any school tax increase of 3.2% or greater must be approved by the public in a referendum; increases less than 3.2% can be imposed by the school board without public approval.

After a brief discussion, the committee voted to recommend that any increases remain below the Act 1 index. In each of the last 2 years, the board has voted for increases that were 0.1% below the index, so no public referendum was held. If the full board accepts the recommendation of the Finance Committee and follows past practices, a tax increase of 3.1% would be expected for the school year 2016/17. In both 2013/14 and 2014/15, the board imposed tax increases that total slightly over 5% over two years without referendums.

There were no tax increases at all between 2005/6 - 2009/10 and in 2013/14, despite an average Act 1 increase potential of over 5% for each of those years. A 5.6% increase was imposed in 2011/12.

Observers at the meeting reported that they heard no discussion about what factors were forcing a tax increase. Likewise, no discussions were heard regarding any cost containment proposals that would limit tax increases.

School budgets for 2014/15 and 2015/16 have required deficit spending, because recent tax increases did not make up for increased spending in the district. Shortfalls have been made up by tapping the 'rainy day fund', which was established many years ago. The budget for 2016/17 has not yet been developed, but many observers expect this deficit spending to continue. No significant spending curbs have been publicly proposed, and the board has been considering spending an additional 1.4 million to implement all-day kindergarten.

'Act 1' is Pennsylvania's school financing law. Originally passed and signed by Governor Rendell in 2006, this law controls most school funding in Pennsylvania. Portions of it provide for funding for schools from gambling revenues. One provision allows for local school boards to raise tax rates to keep pace with inflation without seeking prior voter approval. Any increase above this nominal value must first be approved by the voters in a referendum.

The actual allowable increase changes from year to year based on a complex formula in Act 1. This rate, which is currently 3.2% for Avon Grove, does not always match the federal government's inflation rate. The Social Security Administration recently announced that social security payments would not increase in 2016.

Act 1 provides numerous exceptions to the increase limit which allow boards to raise taxes above the index for specific reasons. Originally, there were 10 possible exceptions. Revisions to the law signed by Governor Corbett in 2011 limited these exceptions to 3 items. These are: 1) Special Education expenses, 2) Teacher pension cost increases, and 3) New school construction. A local school board can petition the state for an exception, and historically most of these have been granted.

Avon Grove Taxpayers for Responsible Spending advocates that all tax increases be put to the voters for approval. We recognize that the schools are under tremendous cost pressure, and that high taxes are required to maintain our excellent schools. If additional taxes are needed, then let those who believe that make their case, but let the parents, citizens, and taxpayers of Avon Grove decide.

AGTRS urges all residents to contact their school director and ask why taxes have to increase, why voters don't get to approve these increases, and what efforts are being made to control and reduce costs.