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Elanco preliminary budget calls for tax hike in 2013-14
BY PATRICK BURNS, Correspondent
The good news: Eastern Lancaster School District administrators anticipate a 2.29 percent increase in revenue for the 2013-14 budget.
The bad news: Expenses, fueled mostly by rising pension costs, will jump 4.35 percent.
That was the information district business manager Keith Ramsey delivered to school board officials on Jan. 14, when he unveiled the preliminary $46.3 million budget.
The spending plan details how expenditures will rise by $1.93 million, leaving a $1.1 million shortfall.
If the district raises taxes by the allowable Act 1 index of 1.7 percent, it would generate $469,000, but a $637,400 gap would remain.
Ramsey said the board could file for two state exceptions that, if approved, would allow Elanco to raise taxes by 3.16 percent -- raising real estate taxes by 0.438 mills.
"If we were to tax to the maximum that we're able to at this point … we would still be shy of the 4 percent needed to balance the budget," Ramsey said.
Salaries, wages and benefits make up 65 percent of the preliminary budget.
The district would make up the difference with a $250,000-plus transfer from its Public School Employees' Retirement System reserve fund, established to pay for soaring pension costs. Elanco has $3.2 million in reserves to offset future PSERS obligations.
The transfer of PSERS funds, plus an increase in local revenue of about $691,000 -- mostly through increased real estate and earned income taxes --would balance the 2013-14 budget.
The 0.438 of a mill increase would bring the district's property tax rate to about 14.279 mills, meaning a property assessed at $100,000 would have a tax bill of about $1,440. The average residential property in the district is assessed at $143,155, meaning the property owner would pay $63 more in taxes, Ramsey said.
The preliminary budget includes salary and wage increases of $585,471, or 3.03 percent. However, the district, which was heavily criticized when it furloughed several teachers two years ago, plans to add at least five more teachers next year.
Benefits in the 2013-14 preliminary spending plan increased by $931,347, or 10.13 percent. Increases in PSER retirement contributions go up $1.04 million, or 12.36 percent.
Local contributions make up 73 percent of Elanco's revenue. The state funds 23 percent and federal funds make up the final 4 percent of the district's income, Ramsey said.
Federal funding will decrease by $209,765, or 11.67 percent, while state funding should increase by $530,199, or 5.27 percent.
The school board will vote on the preliminary budget at its Feb. 13 meeting. A final budget must be passed before July 1.
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