Altoona Area School Board member Dick Lockard's unexpected motion to lower district property taxes by two mills failed in a 5-4 vote.
It also elicited an unplanned announcement from Superintendent Tom Otto that the district has big dreams to repurpose the Wright Elementary School building as another magnet school for the district. Lockard's motion to lower taxes came Monday night as the administration requested approval of a $96.3 million budget for the 2014-15 school year. The budget contained no tax increase but maintained the same 55 mills that the district has levied since 2010-11.
A majority of the board passed the budget and rejected Lockard's proposal to lower taxes by two mills or $600,000 in annual revenue for the district. Lockard said the district has been overtaxing its residents for years. The district annually accumulated fund balances since 1998. Lockard said the district's total fund balance is more than $60 million, a figure administrators did not dispute.
"The fund balance we have in there is taxpayer money. Every year it grows. I think it's about time we stop overtaxing our property owners," Lockard said.
Lockard pointed out that since the 1998-99 school year, the district's actual annually audited expenditures have been much lower than they were budgeted.
As a result, the district's fund balance accumulated more funds. The information Lockard shared was not new to the board. Otto first made an issue of the discrepancy.
Otto said the district was "very blessed" to have its fund balance, which has been built up by previous boards and district superintendent.
The board has $7 million of the fund balance at its disposal as undesignated funds. And following state law, a majority of the fund balance, about $43 million, is committed to expenses for the long term.
"We are in a blessed financial situation. We have
the PSERS (Pennsylvania School Employees' Retirement System) costs for the next eight years covered in our fund balance. We have health care covered for the next several years," Otto said.
But he said the district has been including a couple of million dollars of its savings in its budgeted revenue, and he is concerned that if the board lowers taxes, the district's fund balance could become strained at a time when the district wants to explore new ways to improve education.
"We might as well put it out there. We are looking at repurposing the Wright Elementary School to develop a magnet school similar to McAuliffe Heights. My worry is can we afford to do that? If I come to the board and say, 'Would you give us a million dollars to make the infrastructure of Wright Elementary School appropriate so we could use all Internet-based instruction and laptops so children from all over the district would apply to attend that school?' ... would the board allow us to do that?" he said. "Well, this has forced me to tell you that we are looking to the future. We do have dreams, and those dreams are going to cost money. What is our luxury is we have a savings account."
But he also understood Lockard.
"I understand Mr. Lockard's comments about being fair to the taxpayers, so I will let it into the hands of the board," Otto said.
The district estimates total real estate tax revenue to be in excess of $13 million next year. A majority of the district's budget, about 64 percent, is funded by state funds - funds that John Donley noted are no longer certain.
Sharon Bream said Lockard's proposal had merit.
"We are sitting on a fund balance that has been put there by the taxpayer. It makes perfect sense that that's who it should go back to. I believe this district needs to learn to live within its means, and we need to be careful with every dollar we spend here because we are spending someone else's money," she said.
Bream, Cheryl Rupp and Judy Berryman voted in favor of Lockard's motion.
Donley remained focused on the students.
"Yeah, we want to be fair to the taxpayers, but although it sounds like a large fund balance, we are a self-insured school district that is always at risk for large insurance claims; we have an unknown funding situation with the state, as we hear the falling revenue they are dealing with. Granted it's a large balance, but that could quickly be gone in the blink of an eye."
But President Maryann Joyce Bistline, Vice President Tim Lucas, Ron Johnston, John Klingeman and Donley voted against it.
The vote on the budget came next. It passed with a 6-3 vote, including Lockard.
"I'm not a sore loser. This is a good budget," he said. "But time will tell whether I was right or wrong in overtaxing property owners."
The 2014-15 budget is more than $12 million more than last year's actual, audited budget.
Bream Rupp and Berryman cast dissenting votes, keeping with the same logic for supporting Lockard's motion to reduce taxes.
"I am not going to vote on a budget $12 million more than our last audited budget," Bream said.