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Budget > 2008-2009 Budget Summary Final
For the first time in at least twenty years, there will be no real estate millage increase for the Souderton Area School District budget. In addition to this rare occurrence, there were several other factors that make the 2008-09 budget unusual and unique. The 2008-09 budget for Souderton Area School District was the second budget prepared under the guidance of Act 1 of 2006. The 2008-09 budget timeline and local and state revenues were impacted by this legislation. The timeline and resulting budget discussions were shaped by the consideration of the "Index Resolution" as permitted by Act 1. During October and November Finance Committee meetings the Board of School Directors thoroughly discussed the "Index Resolution"; essentially a statement that the district's budget would not require a tax millage increase of more than an index announced by the Pennsylvania Department of Education in September 2007. Souderton Area School District's 2008-09 index is 4.4%. On December 20, 2007, the Board of School Directors approved the Index Resolution for the 2008-09 budget.
The second change resulting from Act 1 for 2008-09 was the notification received by school districts on April 15, 2008 announcing that, for the first time, there would be property tax relief for approved homestead and farmstead owners as the result of gaming revenues. On May 1 Souderton Area School District was notified that it will receive $2,082,501 in property tax relief for the 2008-09 tax year. Based on the number of approved homesteads (10,563) and farmsteads (60), the amount per exclusion is approximately $196.00 per exclusion.
In addition to the significant role that Act 1 played in the preparation of the 2008-09 budget, the Board of School Directors also took a different approach to the preparation of the 2008-09 budget. Historically, the annual budget is based on and compared to the previous year's budget. It was suggested and extensively discussed during Finance Committee meetings last fall that the 2008-09 expenditure budget be built upon projected expenditures for the current 2007-08 budget. The total projected 2007-08 expenditures would be the base to which a "Local Index" would be applied to calculate the total amount of the 2008-09 budget. The Local Index was based on the average increase in wages earned by the residents during a three-year period (2004-2006) as reported by Berkheimer and Associates. The average increase in local wages was determined to be 2.18% for that three-year period.
Since the 2008-09 budget was built on expenditure projections of the 2007-08 budget, the information found on Attachments A-D graphically portray that projection to budget comparison; specifically the 2007-08 expenditure projections as of March 31, 2008 ($93,678,099) and the 2008-09 budget amount of $95,885,872. The total of the 2008-09 budget represents a 2.36% or $2,207,773 increase over the projected amount for 2007-08.
The 2008-09 Expenditure Budget includes:
- Costs to continue the current program
- Five (5) additional professional positions
- Four in regular education (Function 1100) and
- One in special education (Function 1200)
- Additional computers at all secondary levels, and
- A rate of 4.76% for Public School Employees Retirement System (PSERS), the rate approved by the PSERS board in December 2007.
The 2008-09 budget does not contain planned contingencies that have been included in previous budgets; budgetary reserve and a transfer to the capital reserve fund are two such contingencies that have been deleted.
The 2008-09 Revenue Budget reflects the following assumptions:
- Local Sources
- Millage of 24.26
- Current economic conditions:
- Fewer real estate transfers, less construction and
- Lower interest rates
- State Sources
- Basic Ed Funding increase of 5.67% based Governor Rendell's proposed budget
- Special Education Funding increase of 2% based on 2007-08 projection
- Funding equal to 2007-08 allocations for the following state grants:
- Accountability Block Grant
- Project 720
- Retirement reimbursement based on the PSERS approved 2008-09 rate of 4.76%
- Federal Sources are budgeted at 2007-08 allocations, except for ACCESS reimbursement which reflects a decrease of $25,000 compared to the 2007-08 projection.
Since the 2008-09 budget for the Commonwealth of Pennsylvania probably will not pass until after June 30, there is uncertainty about the amount of basic education and some grant funding, but more important is the rate of the retirement contribution. If the state legislators decide to overrule the PSERS board and require retirement contributions of approximately 7.00% rather than the PSERS-approved 4.76%, expenditures for 2008-09 will increase by approximately $1,000,000. Likewise, revenue from the state would increase by approximately $500,000 due to the state's reimbursement of about 50% of the cost of school employees' retirement.
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