AASD taxpayers better start bracing themselves
If certain members of the Altoona Area School Board had any vision at all, they could look down the road a couple years and see the financial crisis that is looming in the not too distant future.
I submit the following facts for consideration and defy any board member to dispute them.
– Revenues in this year’s budget are projected to be $96.9 million. This includes $2.2 million in debt service which isn’t really money coming in as it’s being transferred from the general fund. It’s being called revenue because it was previously earmarked. Actual money coming into the district is $94.7 million.
– Expenditures in this year’s budget are projected to be $104.4 million.
– The difference between actual money coming in and money going out this year is $9.7 million.
– Other than through property tax increases, there is no reason to think revenues will be higher in coming years. State funding is the source of well over half the revenue and with the state wrestling with billion dollar deficits, any increase from that source is highly unlikely. Local nuisance and income taxes are already pretty much maxed out to the legal limits so higher property taxes are the only way left to increase revenue.
– There is no reason to think that expenditures will be less in coming years. Teacher and administrator salaries and benefits account for most of the expenditures. With the clamor for smaller class sizes that can only mean more money will be needed as smaller classes would require more teachers. No relief will be coming from the debt service side, either, as the district still owes $41.5 million in long-term debt from previous building projects so that is not going to be paid off anytime soon. And don’t forget the KCBA study recommends an additional $97 million in upgrades to the existing elementary schools, exclusive of the high school project.
– The only way the deficit can be covered is either by transferring money from the general fund or raising taxes. The general fund balance has been sufficient in recent years to keep tax increases reasonable.
– The general fund is not bottomless. At the current rate of drawdown it will be empty in about four years. At that point, a tax increase of 3.5 mills or more will be needed to balance the budget. The actual number will probably be quite a bit higher as at least some of the upgrades in the KCBA study will be put to bid, thus increasing the deficit.
It would seem that a bare minimum 3.5 mill increase within four years is inevitable given the current state of the AASD finances, and that’s without building yet another new school or upgrading any existing ones.
The impact of adding another new school to the scenario is twofold.
Taking $25 million from the general fund as a downpayment will empty it in less than two years instead of four.
This fact is never mentioned. Could it be that the board wants to get the new high school project out to bid as soon as possible so it’s at the point of no return before the taxpayers see the effect it will have on their taxes?
The end result of having to cover the already existing deficit plus pay for the new school plus funding at least some of the other suggested upgrades could easily double the property tax burden on AASD taxpayers within the next two years.
If the board employs some of the creative financing that’s been discussed, that is paying interest only payments for the first 15 years and pushing the bulk of the payments 15 years down the road, they might mitigate some of the immediate tax increase.
But that is not fair to the present-day students who will be the ones paying for such irresponsibility over the next 30 years even though they have no voice in the decisions being made now.
It seems a lot of Blair County taxpayers are upset about the county property taxes going up 0.79 mills this year. I wonder how the AASD taxpayers will feel when hit with a much larger increase.