Hollidaysburg eyes deficit

School board to decide how to fix $600,000 shortfall

Although the Hollidays-burg Area School Board passed a preliminary 2017-18 budget earlier this month that did not include a tax increase, it’s not off the table as the board must decide how to fix a $600,000 deficit before its final iteration of the budget in June, said district Business Manager Susan Baker.

Baker indicated two options to balance the budget: a tax increase or using fund reserves.

Last year was the first time in seven years in which the board passed a tax increase, raising real estate taxes 1.5 mills.

After a presentation of the district’s state and local revenue streams Wednesday, Baker said the nine-member elected board will vote June 14 on how it balances the budget.

The task of predicting local and state revenues to balance the estimated

$49 million budget is especially difficult this year because of the Blair County reassessment.

“It’s harrowing,” Baker said.

District officials can’t calculate a property tax increase to offset the deficit until they have the county’s final figures for the reassessed value of the district’s residential and commercial properties.

Currently, the district is in the thick of Blair County’s reassessment appeal process with between 70 and 80 property owners contesting their reassessed property values.

Baker expects the dust of the reassessment to settle around June 7. With property reassessment appeals settled, the district can calculate how much of a tax increase it would take to balance the budget, Baker said.

To have a budget complete by the June 30 state deadline for schools to submit their fiscal plan to the Department of Education is a challenge.

Reassessment issues aside, the district’s budgeting process is also complicated because officials must guess about the level of state funding, which won’t be known until the state budget is passed. State lawmakers are supposed to have a budget in place by July 1, but that deadline frequently has been missed in recent years.

This year, Baker is estimating the district’s state funding at just under

$21 million, which is in the ballpark of Gov. Tom Wolf’s February school funding proposal.

Hollidaysburg’s biggest expenses budgeted in its 2017-18 budget include a 2 percent increase in salaries or $400,000. And after state reimbursement for retirement costs, the district still faces a $600,000-plus increase in its contribution to the Public School Employees’ Retirement System, which is driven by a state-mandated percentage of district payroll.

Mirror Staff Writer Russ O’Reilly is at 946-7435.