East Penn's 2013-14 Budget to Stay Within State Tax Cap
Directors decided East Penn School District does not need the safety net of going beyond its index this year.
The East Penn Board of School Directors on Monday unanimously agreed not to exceed its state-imposed tax cap of 1.7 percent as it hunkers down to formulate its 2013-2014 budget.
Each year the state calculates a rate cap for each district. For 2013-14, East Penn's rate cap -- the maximum amount taxes could go up -- is 1.7 percent. The calculation does not mean taxes will automatically go up 1.7 percent, but they won't go higher than that.
For the past several years the board voted to exceed the maximum tax rate decided for the district by the state, but this year it doesn't need to.
Before the vote, Business Manager Debra Surdoval presented the budget outlook which also included a look back at the 2012-13 fiscal year.
"The ending fund balance was significantly higher than the budget last year predicted which will allow us to stay within the index," Surdoval said.
She pointed to several other strong financial indicators in addition to the positive fund balance that contributed to the assurance that the district can stay within its fund cap. They include successful debt service and more than $1 million in earned income tax revenue.
East Penn would have been eligible for the tax relief if it decided to apply. In all probability, Surdoval said, the district would have qualified for the relief for about $750,000 in category of retirement contribution. The district's strong financial standing makes applying for the relief unnecessary.
The budget will be introduced in March and the tentative date for final adoption of the budget is June 24.