POTTSTOWN — Unwilling to make some of the cuts recommended by the administration — yet — the Pottstown School Board will continue to discuss the pending $96.4 million budget on Thursday.
Some decisions seem to have been made, however. Although there have been no votes, the board seems willing to accept the proposal to close the remaining $3.3 million deficit by drawing down from its reserves, also called “fund balance.”
The school board’s finance committee met on May 8 to further discuss the budget, and the news had not changed much since the last discussion.
In February, the board was surprised to hear that the projected 2025-2026 budget carried a $9 million gap between anticipated revenues and expenses.
By April, the deficit had been whittled down to $3.3 million, partly by raising taxes 5.8 percent, the maximum allowed by the state, and partly with some very unpopular cuts, including not replacing a retiring music teacher, moving all the district’s librarians to vacant positions, not replacing two math teachers, cutting teacher coaches, cutting school counselors, speech therapist and occupational therapist positions, none of which the school board has fully agreed to yet.
Those cuts drew a crowd to the April 17 full board meeting, where many of the cuts being contemplated were objected to by parents, teachers and students.
During the May 8 finance meeting, which was attended by all board members, a straw poll indicated the majority of the board is not yet prepared to adopt a budget with those cuts, and they requested more information from the administration, including the financial implications of leaving more of the positions filled and taking more money from fund balance.
Oakley had projected the impact on the budget five years out, should the board continue to rely on which is now a sizeable “unassigned” surplus of $6.8 million. With all state funding remaining the same, that fund balance would turn into a deficit by the 2028-2029 school year if the board continued to draw from it.
However, board member Laura Johnson, who remarked, “This whole thing is a bummer,” argued that with increasing state funding as the result of the lawsuit declaring Pennsylvania’s education funding unconstitutional, flat funding from the state in the next few years was unlikely. Instead, she said, the district would more likely continue to receive additional funding from the state.
She also argued that, should the effort to reform how charter school tuition is calculated, particularly for cyber charter schools, the financial impact on Pottstown’s budget would be even more positive.
Board member Sue Lawrence said the district’s personnel structure, as proposed, “is all kind of like a house of cards. This all feels like a shell game, cutting librarians, math teachers and counselors. What if our scores go back down? We’ll be in bigger trouble with the state than we are now/ If you cut library, language arts scores will go down and we will see more of a disparity” between low-income districts and wealthy ones, she said.
Board member Deborah Spence argued the district should more aggressively seek “payments in lieu of taxes” from tax-exempt properties such as The Hill School.
With the average property assessment at $79,000, far below the price houses are currently selling for, a millage increase from 3.315 to 3.597 would result in an annual tax hike of $192, according to Business Manager Maureen Oakley. However, for those who have registered for the homestead tax relief, the annual increase would be cut to $85.
Ironically, in the last year, 40 properties that had been on the homestead rebate list did not renew, meaning the money that comes to the district from gambling revenues was divided among fewer homesteads.
In addition to charter school tuition reform, another major element of the budget that could have a major impact would be a county-wide property reassessment.
Oakley gave several examples of recent property sales to show the effect. She said a home at 355 Chestnut St. sold for $255,000 recently, but is only assessed at $74,000. A full assessment would mean another $400 in tax revenue for the district. A property at 519 N. Charlotte St. sold for $285,000 but is assessed at only $75,640. An assessment at market value would bring another $759 in tax revenue.
Now multiply that by more than 11,000 properties in town and the school district’s revenue line would look $3.3 million healthier, she said.
“I have serious concerns about what our finances will look like in the future,” said Superintendent Stephen Rodriguez. “It’s very possible we will be in a recession 12 months from now, which could have a serious financial impact in the next few years.”
Board president Katina Bearden noted that there is a certain element of “fluidity” to the budget and that a budget could be passed that anticipated more state aid, which would prevent some of the personnel changes from being made until the state budget is adopted.
“If the budget had to be passed tomorrow, I would vote yes,” said Bearden. But because there is more time, that time should be used to try to find less painful ways to balance the budget, she argued.
“Nobody’s going to be happy at the end of the day,” predicted school board member John Armato.
The next school board meeting is Thursday, May 15.
