Blog: Lost Taxes And Savings Options for T/E

At this week's T/E Finance Committee meeting, old and new budget strategies for FY2012-13 were discussed.

Several interesting discussion points emerged during the meeting.There was much discussion about the school district’s decreasing real estate tax revenue. We learned that for 2011, there have been 147 successful residential real estate assessment appeals ($217K) and 41 successful commercial appeals ($352K) for a combined total of $570K in lost tax revenue.  The largest commercial appeal was by Vanguard who was successful in five separate appeals. 

There is a possibility that the school district may appeal some of these successful commercial appeals.  The example of Mealey’s Furniture and Big Lots was used – where a commercial real estate owner could have appealed their tax assessment while their real estate was vacant, received a lower assessment and then the property is leased and its value goes back up (but the commercial owner remains at the lower assessed rate).  The case could be made by the school district that the assessed value of the commercial real estate has gone up and they should now pay more.

Appealing some of these commercial decisions could be a way to generate additional revenue for the school district.  However, what was unclear was the ‘cost’ of these appeals to the school district (financial and staff time).  In Harrisburg, there is discussion on requiring nonprofits organizations to pay real estate taxes.  This was not discussed at last night’s meeting, but should this change occur, there is some new tax revenue to the school district.  I wonder what kind of revenue could be generated from real estate owned by nonprofit organizations.

Under the 'Demotion of Professional Staff for Economic Reasons', Dr. Dan Waters, school superintendent raised the possibility of lessening the number of non-teaching days of teachers as a possible cost-savings measure.  The teachers contract contains 182 instructional days for students plus an additional 9 days of professional related in-service days for teachers.  Under 'demotion for economic reasons' it is possible that the school district could reduce that number of non-instructional days.  There was a stated cost of $200K per day for the non-instructional days (teacher's salaries and benefits).  This was listed under the 'new' budget strategies under review for FY2012-13 and there will be further discussion.

The outsourcing of custodial services remains as a budget strategy.  The savings by outsoucing custodial services is listed as $950K.  Although outsourcing was a possibility for the FY2011-12 year, by opting not to take any increase in salaries the custodial services remained in-house this year.

Other budget strategies, such as implementation of fees for extra-curricular activities, charging for busing for summer school and some extra curricular activities remain open budget discussion points.  

For full story on Finance Committee meeting, click here.