East Penn School Board Approves $120 Million Budget

The East Penn School Board finished off a difficult budget season by adopting a $120.3 million spending plan Monday night, but not before an 11th hour effort by by several directors to shave about $328,000 from the fund balance.

Before voting on the new budget, which includes a 1.8 percent real estate tax increase, Board Vice President Elaine Gannon moved to lower the fund balance and reduce the tax hike to 1.4 percent.

Gannon argued that district employees made a sacrifice by freezing their salaries for next year and that more of that money should have gone to lower taxes. She compared the district to a family who foregoes necessities to boost their savings while “struggling to make ends meet.”

Director Alan Earnshaw said he was “completely opposed” to Gannon’s motion, saying that the district’s level of austerity cannot be maintained year after year and that revenues continue to be imperiled by state lawmakers.

The district “will need that fund balance to make the next budget work” as well the one after that, he said. He said he fears the quality of education at East Penn cannot be sustained indefinitely under spending freezes and other austerity measures, a sentiment echoed by Director Francee Fuller.

To cut the fund balance for a “symbolic tax reduction” would be “imprudent in the extreme,” Earnshaw said.

The tax savings for the average homeowner under Gannon’s proposal would be about $13 per year. 

Board President Charles Ballard said the budget’s reserve fund, which is a major part of the balance, needed to be funded at 5 percent of the budget in order for the district to maintain a favorable bond rating. The rest of the fund balance is the difference between estimated and actual spending, which is hard to predict accurately, he said, especially given the volatile political climate in Harrisburg.

“We’re going to need every single penny” of that reserve, he predicted, arguing that Gannon’s proposal amounted to a “cosmetic change to make someone … feel better.”

In a 5-4 vote, the board defeated Gannon’s motion to reduce the fund balance, with Gannon and Directors Rebecca Heid, Michael Policano and Julian Solz voting in favor.

The original budget, with the 1.8 percent real estate tax increase, then was passed, also by a 5-4 vote along the same lines with Ballard, Earnshaw, Fuller and Directors Samuel Rhodes and Terry Richwine voting in favor.

The new budget sets the millage rate at 46.15, meaning a homeowner with a house assessed at the district median 0f $65,400 will pay $3,018.

Earlier in the meeting Gannon was presented with a Carbon Lehigh Intermediate Unit service award for serving 15 years on the school board.