Tentative school budget carries tax increase

Staff Writer

By Ted Lutz
Republican Staff
There's good news and bad news for property-owners in the Kane Area School District.
First the bad news.
The tentative school budget for 2016-17 carries an increase in property taxes.
Now the good news.
The size of the tax increase is only 1.88 percent.
The jump could have gone as high as 3.7 percent and still have stayed within the adjusted state "index" for Kane. The Kane School Board agreed last December to limit any tax increase to the limit set by the "index."
School District Business Manager Jessica Gabriel unveiled the proposed 2016-17 budget Thursday at a school board workshop in the administration wing on the west side of the Kane Middle School.
The school board is expected to act to adopt a tentative budget at its business meeting Thursday, May 5 at 7 p.m. at the middle school auditorium.
A final budget for 2016-17 must be adopted by June 30.
In discussing the tentative budget, School Superintendent Bob Gaetano said "we chose not to increase to the allowable index."
"We are thinking of the economic climate," he added. "We know it's not good."
According to Gabriel, the tentative budget would raise the tax rate in the McKean County portion of the school district from 16.56 mills to 16.95 mills.
This means taxpayers in the McKean County part of the district would pay $16.95 per $1,000 of assessed property valuation. School taxes are payable in August.
Gabriel did not present the tax rate for the Elk County portion of the school district. However, the percentage for the increase would be about the same.
Gabriel said the "average" residential property-owner in the school district would be looking at a $15 tax increase under the tentative budget.
The "average" residential tax would increase from $616 last year to $631.
A "maximum" increase under the December board declaration would jump the tax rate to 17.17 mills in McKean County. A budget up to the limit would raise the "average" tax bill by $22 from $616 last year to $638 this year.
Although the proposed tax increase is $15 for the "average" residential property-owner, even this modest amount could be considered a burden for those taxpayers on fixed incomes. Monthly Social Security payments did not increase this year.
As Gabriel pointed out, local taxes account for only 25 percent of the revenue to operate the schools. Kane and the other 500 school districts in Pennsylvania rely heavily on state aid to function.
Kane and other schools in Pennsylvania still have not received all their state aid for 2015-16 due to the budget impasse.
Gabriel said Kane might be "seeing funds flowing" from the state by the end of the month.
She pointed out, however, that Kane may not receive a scheduled $80,000 reimbursement for Social Security payments.
"We might not get it at all," Gabriel told the board.
This is the first budget presentation for Gabriel, the new business manager for the school district. She replaces Steve Perry, who retired April 1 after a 36-year career in the school business office. Perry had been the business manager since 1992.
Board member John Ball called Gabriel's tentative budget report an "excellent breakdown" of revenue and expenses.
Because the tentative 2016-17 budget suggests a deficit of $1.4 million, it appears the school district will be appropriating about $700,000 in surplus funds to balance the next spending plan.
For the first time, the district also may be tapping one or more of its special reserve funds to make ends meet.
As of February, the district's Retirement Rate Stabilization Fund (RRSF) had a balance of $5,023,258.73.
The National Forest Lands Allocation Reserve Fund had a balance of $632,081.14 as of February.
The Capital Reserve Fund totaled $2,989,297.97 as of February.
Perry years ago set up the RRSF to prepare for state mandated increases in school district shares of pensions.
In 2016-17, the share for Kane and other school districts will climb to more than 30 percent. The rate is 25.84 percent in the current school year.
The school district receives a share of timber-sale revenue in the Allegheny National Forest (ANF). But these funds have been declining in recent years. Gabriel estimates that the school district will receive just $150,000 in 2016-17. The peak in timber revenue was more than $600,000.
The tentative budget also carries a decrease in revenue from the Earned Income Tax (EIT) assessed on those who work. A shortfall of $40,000 in EIT this year for the school district is an indicator of a lagging economy with job losses.
School Board President Claire Ann Buckley and board members Keith Hastings, Krista Jamerson, Tom Kerek and Ball attended the 96-minute workshop. Board member Linda A. Anderson participated via speaker phone. Board members Scott Paul and Susan Grolemund did not attend the forum.
Due to the recent retirement of Dick Coleman, the school board has just eight members for now.
The workshop was open to the public, but no one attended.

Discussion on Kane school budget
Photo by Ted Lutz
Kane School Superintendent Bob Gaetano (left) and School District Business Manager Jessica Gabriel (right) listen intently to comments Thursday at a school board workshop. A tentative school budget for 2016-17 carries a tax increase.