By Evan Brandt
ebrandt@pottsmerc.com

• POTTSTOWN — With a 5-3 vote, the Pottstown School Board Thursday adopted a preliminary $53 million budget for 2012-13 which has the potential to raise property taxes by 4.17 percent.
• For a home with a median property assessment in Pottstown of $74,000, that would mean an annual increase of $113.
• The tax increase would close a projected $1.2 million gap between revenues and expenditures for the 2012-13 school year.
• However several school board members, were quick to point out that the board anticipates any tax hike in the final budget in June to be within the 2.4 percent increase set by the state index.
• The resolution adopted by the board makes note of the “expectation that exceptions will be applied for prior to the Feb. 9 deadline.”
• “Exceptions” are the loophole set out in the Act 1 law which sets the index limiting tax hikes, which allow districts to exceed that limit for certain reasons. Among them is a major school construction project which the district is poised to begin this summer.
• If the board does decide to apply for the exceptions, it will be the first time since Act 1 was adopted that it has done so. Without the exceptions, any increases beyond the index must be approved by a public referendum.
• According to the resolution adopted Thursday, a 4.17 percent property tax hike would represent a 1.5362 mill increase, increasing the district’s millage to a rate of 38.3465 mills.
• New school board members Ron Williams and Mary-Beth Lydon were joined by board member Thomas Hylton in voting against the preliminary budget.
• Voting in favor were School Board President Judyth Zahora, Vice President Robert Hartman Jr. and members Polly Weand, Dennis Wausnock and Andrew Kefer. Board member Valerie Harris was absent.
• “I’m torn between the need to do what we need to do for our students and not adding to the tax burden of our citizens,” Williams said.
• Weand responded that “in the past, we have always been able to come up with the savings to go below the index. This is just the beginning and now we really start looking at the budget closely,” she said.
• Williams said he understands that, but added “I don’t see the value of going beyond the index and scaring our citizens that it is going to happen. I don’t want to create that illusion.”
• Hylton said he would consider voting for a budget that stayed at or below the index, but could not support one that goes beyond, even in the preliminary stage.
• Lydon offered no explanation for her vote against the budget.
• Kefer said he too has no desire to burden taxpayers, but expressed confidence Business Manager Linda Adams would be able to “work your magic” and wrestle the budget under the index.
• For the coming year, Pottstown’s Act 1 index is set at 2.4 percent. A tax hike at that level would increase the annual tax burden for the same median home by about $65.
• The budget Adams put together assumes no increase in state or federal funding and few spending increases. Those few increases assume an 8.5 percent increase in medical insurance expenses; a 43 percent hike in costs to pay into the retirement systemincreases for payments to the state pension fund and an additional $220,000 for debt service on the $10 million the board has already borrowed for the elementary school renovation project.
• Although Act 1 required the adoption of a preliminary budget in January or February, few districts put much stock in the numbers because it is far too soon to have an accurate prediction of major budget drivers such as health insurance costs, state aid or even fuel and energy costs.
• Often in the past, school districts, by law, have had to pass final budgets without even knowing how much state aid they will receive because the state legislature, which imposed that deadline, has not met its own legal deadline and adopted a budget on time.
• During a recent presentation on this preliminary budget, Adams described the document adopted Jan. 19 as “a stake in the ground.”
• Prior to the board voting, Superintendent Reed Lindley reviewed some of the cost-cutting measures the district has undertaken in the last two years to balance its budget.
• In two years, he said, the district has cut more than 47 employees from its payroll, including more than 26 teachers — the equivalent of one elementary school’s staff.
• Lindley also told the board that Pennsylvania Education Secretary Ron Tomalis met recently with Montgomery County schools superintendents and told them that Gov. Tom Corbett is “committed to flat funding” for the 2012-13 state budget he will release next month.
• However, Lindley said Tomalis also noted that the Commonwealth is in the red for the current year, so Corbett’s commitment may become a victim of circumstances.
• He predicted that the district will continue to face deficits in the years to come and that in order to maintain its goal of being “a continuously improving district,” it must look for new ways to provide services outside the traditional funding stream.