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East Penn Resident Praises School Board for Budget Vote

John Boyle of Emmaus writes to thank the East Penn Board of School Directors for maintaining quality of education while keeping tax increase low with 2012-2013 budget.

To the editor:

I would like to express my appreciation to the East Penn School Board Directors for the 6-3 vote to approve the 2012-2013 Final Budget. This budget maintains the high quality of education provided by the district while keeping the tax increase at a low 1.3% (just over a $40 yearly increase for the average homeowner).

It is important to understand that this budget was passed during a very difficult economic climate. Like all public schools, our district continues to feel the effects of the nearly $1 billion in state cuts from a year ago. School districts across the state are laying off staff, cutting programs, and raising taxes at an alarming rate. Nearby Parkland just passed a budget that increases taxes 3.67% despite measures that include a teacher salary freeze, using over $3 million in reserves, and reducing staff by 60 through attrition. Easton, who also implemented a teacher pay freeze, will be shedding nearly 100 staff positions including active teachers and will still have a tax raise of 2.2%. Other nearby districts with tax increases include Bethlehem at just under 5% and Salisbury at 4%. 

Here in East Penn our community has been spared from larger tax increases and spending cuts due to the prudent financial management of the district.   Superintendent Thomas Seidenberger has taken measures such as negotiating an employee wage freeze, reducing departmental spending, bond refinancing, downsizing staff through attrition, energy savings, and implementing a district cyber school.

Something that I was glad the district did not approve was the idea of using additional money from the district fund balance to achieve a 0% tax increase.  Having a healthy fund balance is important. At the school board meeting on June 11th the managing director of Public Financial Management, Scott Scherer, gave a presentation on refinancing district bonds. In recent years we have saved $9,805,150 by refinancing and will have the opportunity to save an additional $305,823.94 through additional refinancing in the near future. East Penn is able to successfully refinance bonds because of the AA2 Moody’s rating. Scherer clearly indicated that one of the factors in that rating was the budgetary reserve. In addition, the Government Finance Officers Association recommends having a budgetary reserve for two months of operating expenses. We already go well below that mark in the budget that was just passed. The Pennsylvania School Board Association recommends keeping a 5-10% budgetary reserve.  The budget that was just passed will result in a fund balance approximately only 4.76% of the budget. Clearly, the school district should not further spend down the fund balance which would endanger future budgets. 

School board decisions to raise taxes, even at a small rate, will never be popular. However, upon full examination of the facts of the matter, I believe the 6-3 vote was the correct decision. We need to think beyond one year and work to maintain the quality education we have come to expect from the . 

John Boyle, Emmaus

Tax Payer July 16, 2012 at 11:09 PM
Woof Woof Woof! same old BS. Every year...
Thaddeus Dobracki April 28, 2013 at 11:03 PM
Mr. Boyle, was it prudent for EPSD to pass a budget with a $4 million deficit that reduces the $10 million fund balance by 40%? That's what EPSD did. Why is this bad for PSD and not EPSD? June 25 EPSD minutes say "He(Earnshaw) talked about the uncommitted Fund Balance for the 12-13 year that shows slightly over 10 million dollars. He said that is the best estimate of the administration of the remaining funds that would be available to the district. The total revenue is $114,974,776 and the total expenditure are $124,996,104. There is a Budgetary Reserve of $5,952,195. He said the district will then expend $119,043,909. He said there is a 4 million dollar difference so we are already using about 40% of the Fund Balance to balance the budget this year. If an additional 1.2 million dollars, as suggested by Mr. Stolz, is added to the 4.1 million dollars then the district will have 1.2 million dollars less. If 5.2 million dollars is spent out of the Fund Balance, that would leave less than 4.8 million dollars of Fund Balance. If the funds are taken out of Fund Balance and the Budgetary Reserve there will not be enough to balance the budget next year." ref: page 6 of http://www.eastpennsd.org/School%20Board/_boardminutes/2012/june252012.pdf. Goodness, if spending down the $10 million fund balance in the two yrs with a $5.2 deficit would have been bad, isn't spending the fund down in 2.5 yrs with a $4 million deficit just as bad? There's more to this than meets the eye

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