Savings help as property tax revenues continue to slide
By Mike McGann, Editor, The Times
KENNETT — A series of bond refinancing moves is expected to save the Kennett Consolidated School District some $670,000 over the next fiscal year, offsetting continuing drops in local tax revenue.
The moves were formally approved by the Board of Education, Monday night.
The district will issue two sets of bonds, one this year and one in early 2013 to refinance the debt from bond issues in 2003 and 2008. Thanks to lower interest rates today, numerous local school districts and municipal entities have been able to save by paying off old debt and issuing new bonds.
The school district may again find itself with challenges while putting the 2013-14 budget together, officials say. Tracy noted that reassessments of local property continue to reduce net revenue, an estimated $600,000 in the last year, and, he said, a total of $4 million over the last four years.
With lower revenue and higher than expected costs for special education services from the Chester County Intermediate Unit, left the district with a $435,000 shortfall in the 2011-12 budget, covered by district reserves.
With the new Act 1 limit — the maximum amount of school tax increase — set at 1.7% again (a change to a rolling average slows the impact of the improving state economy on the index), the loss in property tax revenue effectively cuts that limit in half. District officials say they expect to apply for exemptions for special education and pension costs, which are expected to increase again by another 3% of total pension-eligible payroll.
“I don’t think any of us have been comfortable with the level of tax increases in recent years,” board of education president Douglas Stirling said, acknowledging how difficult it would be the for the district to come in with an increase at the Act 1 limit or below without exemptions.
The formal budget process for the 2013-14 school year is expected to start in December.
