Central Bucks Adopts Preliminary Budget

Property owners wondering whether taxes in the Central Bucks School District will be going up next year will have to wait a few more weeks.

The school board on Tuesday approved a $288.3 million spending plan that includes a 1.7 percent real estate tax increase, but business manager Dave Matyas admitted the real number won’t be known for a while.

That’s because Matyas and the rest of the administration have no idea how their revenues will be impacted when Gov. Tom Corbett unveils the cash-strapped state’s budget in February.

“If our subsidies are cut, that throws a whole different picture on our revenues,” said Matyas. “Obviously, we still have a lot of work to do.”

Earlier this month, Corbett said state revenues were running about $500 million below estimates and predicted public education subsidies could be frozen or cut in 2012-2013.

“We’re worried about what is going to happen at the state level, in addition to what’s happening with our local tax revenue,” said Matyas.

As a hedge against the unknown, Matyas said the district will apply for budget exceptions that would allow a tax increase beyond the 1.7-percent state-imposed limit without seeking approval through referendum. The deadline to apply is Feb. 2, well before the Governor releases his budget.

“It’s something we do every year as part of the budget process,” Matyas said of the exceptions. “If we miss the deadline and need them, we can’t go back.”

Salaries ($140.7 million) and benefits ($66.1 million) account for about 71 percent of the budget. The budget anticipates using $2 million from fund balance. Last year, the district used just over $3 million.

Contributions to employee retirement plans continue to be a major drag on the budget. With the district’s share expected to increase from 8.65 percent to 12.36 percent in the budget, taxpayers will have to shell out an additional $4 million.

And it will only get worse, with the district’s obligation climbing incrementally to 28 percent in 2018-19 and remaining there for the next 15 years before slowly going down.

The $288,338,142 spending plan represents a 2.74 percent over the current year. On the expense side, the biggest increase (13.35 percent) is for principal payments on debt and capital items, while the biggest decrease (16.37 percent) is for interest payments on bonds.

The budget anticipates continuing the trend toward outsourcing the district’s transportation services. About half of the operations are handled by First Student. Last year, the district cut 37 bus drivers and gave those routes to First Student.

Matyas said the cost of health care and retirement benefits has made district-run transportation operations uncompetitive with First Student. He estimated the cost difference for 2012-2013 at $10,000 per bus.

The district could save $1.25 million per year by turning over all transportation services to first Student, he said.

Real estate assessment appeals continue to hurt the district’s local revenue stream. While the district has about 22 percent of the county’s students, it accounts for about 46 percent of all assessment appeals, costing the district about $5 million in lost revenue.

According to Matyas, external factors affecting the budget include:

• the duration of the current economic downturn;
• future healthcare cost increases;
• dwindling investment rates;
• the stale housing market; and
• uncertain state revenues.

Over the next few months, the administration will refine staffing needs and healthcare projections, analyze revenues and expenditures, and study the governor’s budget’s effect on district subsidies.

Matyas said major goals in the 2012-2013 budget include keeping any tax increase at or below the state index; providing recurring funds for technology, transportation, and capital projects; preparing for the looming pension crisis; and maintaining a quality education program by protecting the academic core.