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Take our Poll: Do you Favor a Zero-Tax East Penn Budget?

The 2012-2013 East Penn School District Budget approved Monday night includes a 1.9 percent tax hike, but there were other zero-tax options on the table.

The approved Monday night a preliminary final 2012-2013 budget that includes a hike in a 5-4 vote that followed, what the Express-Times describes as “hours of, at times, acrimonious discussion.”

The dissenting votes in the end came from Directors Lynn Donches, Rebecca Heid, Michael Policano and Julian Stolz. Donches, Heid and Stolz each proposed amended versions of the administration’s proposed budget that failed to gain traction during the meeting.

Donches proposed a spending plan with no tax increase, stating that East Penn should be spending more of the district's fund balance to bridge the budget gap.

Heid suggested using a $1,250,294 construction reimbursement from the state instead of depleting the fund balance to offset 2012-13 taxes. That money is currently slated for a 2013-14 pension payment.

Stolz advocated a budget plan that combined aspects of Donches' and Heid's proposals.

All three proposals failed before the administration's proposed budget was ultimately approved.

East Penn will vote on the final budget for 2012-2013 on June 25. The state of Pennsylvania mandates that final school budgets be adopted by June 30.

truth seeker May 17, 2012 at 07:02 PM
To use this money would be a one time feel good measure that would put future budgets at great risk. I see the numbers just as well as you do. The difference is that you want to use it as if it is just extra stuff laying around. Perhaps what one might call a slush fund. The East Penn Press give a good explanation as to why it cannot be used as you are sugesting. I'm saying that the auditor most likely would have mentioned that the district had a large excess that it did not need from year to year if that was the case. I really think you guys should bring him in on this. That way we could be sure it is not political.
Thomas J Boyko May 17, 2012 at 11:38 PM
what with the 19% hike in county and borough taxes, along with 4% in medicare and now 1.9% in school tax.... and oh yes, the cost of gasoline .... they tell us to save for the golden years ...tell me for what... so they can pick the seniors pockets to the grave when was the last time anyone besides maybe a an East Penn school board member got that much
Steve Godusky May 18, 2012 at 12:43 AM
All I can say is remember the 5 Board members that are voting down any chance of a zero percent tax increase. They need to go. They are the most arrogant people thinking that there are no cuts to be made. I wish I had a 10 million dollar balance in my checkbook that I refuse to spend. Get rid of these incapable people drawing the out of towners that are coming here to avoid their hight taxes to our school district and making taxes rise.
Steve Godusky May 18, 2012 at 12:47 AM
Please do not accept any more comments from people that are too cowardly to leave their real name. If you can not reveal yourself don't reply.
Chuck Ballard May 18, 2012 at 05:13 AM
Well, since school board members are unpaid volunteers, and some of us are senior citizens on fixed incomes, they got nothing either. Any senior citizen who qualifies for the state property tax and rent rebate program can get another matching amount from the East Penn District by applying for it through the business office. Forms are also usually stocked at tax collector's offices. That is a program that we have had for years, and it is a program we are not required to have. Over 400 deserving senior citizens took part in the program last year. I agree that property taxes are regressive, but it is up to the legislature to do something about that. School boards have no choice in the matter.
Chuck Ballard May 18, 2012 at 05:23 AM
Lots of cuts have been made. For the first time in the history of the East Penn School District, the budget last year was less than what was spent the year before. The problem is, there aren't enough cuts legally available without cutting programs, to make a zero tax increase possible. You want a zero increase, you come out and say what programs you want to cut out, and defend those cuts in public. Don't point to prudent reserves and say that one time available money should be used to artificially reduce tax rates. The only way to lower taxes is to cut expenses to the point where revenue matches expenses. That only works short term, because despite what Mr. Landi says his definition of inflation is, it is a fact of life and has been operating in the US for over 150 years, averaging 3% for that WHOLE time. At some point, it has to catch up with you, no matter what you do, and taxes will go up (again).
Giovanni Landi May 18, 2012 at 03:45 PM
Mr. Ballard – It may be the first time in EPSD history that the budget was less than the previous year, however if my projections are correct the district's expenditures will be $2 million more this year than last. Even with this increase in spending it appears the district will add approximately $1.5 million to the ending fund balance, and that doesn't include the additional $1.25 million PLANCON money that came in. Makes you wonder if the preliminary budget is the only budget not worth the paper it's printed on. I'm glad to see that you are finally admitting that the excess fund balance exists. Now it's called "prudent reserves". I guess one man's "prudent reserves" are another man's "excess funds". Maybe the difference is whether you are the person who collects the "prudent reserves" or the person paying the "excess funds".
Giovanni Landi May 18, 2012 at 03:46 PM
The taxpayers agree with the board that we should have prudent reserves. The state recommends 5% and so does the board. I have no issue with a 5% reserve, I think that's good planning to have this reserve, but if the ending fund balance exceeds 5% then I think these additional funds should be put towards the next year's tax increase, and if it zeros out the tax increase then that’s great for the taxpayer. It may mean we overpaid the year before, but since it offset a current tax increase it will balance out. If in the following year revenues or expenditures fluctuate and we spend some of the 5% budgetary reserve I would expect my taxes to increase enough to cover replenishing the spent funds. If you don't raise my taxes on surplus years then I trust that you are only raising my taxes because you need to. However, when you have a surplus for 6 out the last 9 years and you continue to raise my taxes anyway I start to wonder if it is necessary or if it's the only way you know how to make a budget. My definition of inflation is the same as yours. I'm just pointing out the cause. I have done a lot of reading on this subject and recommend a terrific essay at the Ludwig von Mises Institute by Murray N. Rothbard http://mises.org/daily/3127
Giovanni Landi May 18, 2012 at 06:10 PM
truth seeker – I wouldn't recommend people read the East Penn Press article. It appears that it contains mistakes. For example Mr. Stoltz never said to take $1.45 million out of the general fund to prevent the tax increase and the PlanCon money was only $1.25 million, not $12 million as the article states. The articles on Patch do a much better job of explaining the information also WFMZ had a very good article. http://www.wfmz.com/news/news-regional-lehighvalley/East-Penn-battles-over-proposed-budget/-/132502/13393104/-/roh7yh/-/
truth seeker May 18, 2012 at 06:37 PM
Giovanni and others who agree that we can use this supposed extra money in the budget to have a large tax giveback: If what you say is true than you must believe that 5 voters on the board would rather not replace retiring teachers and raise taxes 1.9% (or whatever the number gets down to). Both of these decisions are unpopular and one leads to larger class sizes which nobody wants. If the extra money exists or has existed for years as you claim, what would be the possible motivation to hold onto the money?
Robert Sentner May 18, 2012 at 07:21 PM
http://www.pionline.com/article/20120405/REG/120409997/catastrophe-bonds-offer-diversification-but-a-lot-of-risk-too http://www.pennlive.com/midstate/index.ssf/2010/12/pension_law_leaves_pennsylvani.html 2 great articles.....enjoy and wonder what will happen to your taxes in the near future very very interesting, just think they keep raising taxes to keep there defined benefit pension going than invest is stuff like this.....unreal
Giovanni Landi May 18, 2012 at 08:16 PM
truth seeker – That's a very good question and honestly I don't have an answer for you. I don't think it's for nefarious reasons or because they don't care about education. Maybe they didn't do the research like we did; maybe they just trust the administration (a little too much). Maybe they believe all the scare tactics that are used to paint a doom and gloom scenario if they don't follow the superintendant's recommendations. Parents are worried their kids won't get a good education, and property owners are concerned that their property values will drop, so out of fear they believe the worst. The media also provides cover for them by saying things like "siphoning money out of the fund balance" instead of "spending down the excess taxes collected to the required 5% budgetary reserve" (sometimes perception is reality) or not presenting both sides of the story for example the East Penn Press article you mentioned above quoted Mr. Ballard, but no counter points from Mrs. Donches were included. That's about as fair and balanced as Fox News.
Giovanni Landi May 18, 2012 at 08:16 PM
We all want what's best for both the kids and taxpayers. It's a difficult balancing act, but I would rather have seen a teacher added and class sizes decreased than to have the excess fund balance continue to grow. And speaking of teachers, I'm bothered by the constant blaming of teachers. I can't speak for all the teachers in the district, but the teachers my children have had are fantastic and my kids love them. I don't think it's fair that the teachers took a pay freeze to help "save" this year's budget and now it looks like there will be another surplus. I would be mad if my company claimed times were tough, asked me to take a pay freeze and then posted a profit for the year. But for some reason the teachers keep supporting them. Maybe it's time to think outside the box. We know young kids benefit from smaller class sizes and colleges pack a lot of students into lecture halls. Maybe we should decrease the class sizes at the elementary schools by taking teachers from the high school. This would benefit the young kids while preparing the juniors and seniors for the type of learning they will be expected to do in college.
Ronald Weaver May 19, 2012 at 03:16 AM
I am sure all governmental levels will be glad to accept checks from people that advocate higher taxes. This is a simple solution that would not work for an obvious reason.
Chuck Ballard May 19, 2012 at 06:08 AM
No matter how many times you tell these people that an 'excess' fund balance does not exist, they won't listen. A perfect example of confirmation bias, they won't accept any information that doesn't support what they believe. First of all, something is 'excess' if it is not needed to support the function of the business. BOTH a designated 5% that is always there for emergencies AND a 5% amount to cover errors in estimating revenue or expenses are needed to run a fiscally prudent operation, as evidenced by the commentaries that Standard and Poors and Moodys rating services have made about the District's fiscal policies over the past 20 years. Just because someone wants to declare something 'excess' doesn't make it so. Part of the fund balance IS being used this year to reduce the tax increase, but not ALL of it as Mr. Landi advocates. That is still dangerous, because the fund balance is NOT a continuous stream of revenue, but money that can only be used one time and then it is gone forever. What part of 'revenue must match expenses' don't you understand Mr. Landi? If you cut tax rates with one time money, the next year, you do not have that money, and you are in the hole for revenue for the amount of inflation PLUS the amount of one time money you used to plug the revenue hole. The usual scenario is that you end up having to increase taxes DOUBLE the amount you would have done to match inflation, because you didn't do it the previous year. Duh!
Ronald Weaver May 19, 2012 at 10:57 AM
Chuck.. a very difficult problem with many good points on both sides of this issue with much emotions expressed by concerned tax payers, some not being as able to experience an increase in their taxes for many different reasons. I believe most citizens including myself feel by throwing more money at a problem does not solve the long term problems alone but prolongs the solution to a financial problem. It is unfortunate that our society and government looks at their own short term benefit than being honest and look at a solution that has a more long term solution considering all sides of a financial issue. More williness to be transparent on how tax payer money is spent and a williness to take efforts to cut costs that may be painful to many, no pain no gain. Regardless of increase costs of operating a school district, their is a limit of what many tax payers can pay. A difficult problem to balance and satisfy all sides of this issue need I say.
for real May 19, 2012 at 11:31 AM
As a fical conservative who tends to vote Republican I do not like to see taxes go up. I want to see all increases kept to a minimum; and if they happen I prefer them to be at the local level where government tends to be more responsive. I do not subscribe to this new right wing nonsense that no taxes can ever be raised. My wife and I came to this area in part because of the high quality education in East Penn. I have a nephew in the district and he and his parents love what they see and I here a lot of that from my neighbors as well. Looking at the school board notes and reading the media tells me that EP has worked hard to keep costs down. I hope to add some of my own children to this district if the all mightly blesses us. What I ask is that quality of the schools stay high and any tax increases stay low. That I can live with. The recent wage concessions, energy savings, not replacing some staff as they retire tells me this district is making that effort. I also look around and see many other districts raising taxes higher and in some cases much higher. I think we should be greatful for what we have here and I do not trust those that subscribe to Grover Norquist types of approaches to all government.
Ronald Weaver May 19, 2012 at 02:34 PM
I feel that our nations financial problems will not be solved because of the political arena. I am a realist, we will have to be forced to do later what we cannot do now. It is just a matter of time. Hopefully people of different interests and views will be willing to compromise on BOTH sides of the issues, this is very unlightly with the general public not understanding the implications of what politicians preach to get elected. They differ just to differ, this attitude will only lead to failure. It is all about votes, if only we could put a price tag on the money wastefully spend to buy votes. (both sides)
Kevin Kelly May 19, 2012 at 05:25 PM
Thanks for real, that seems very reasonable.
Chris Donatelli June 23, 2012 at 01:53 AM
Mr. Ballard, Your attitude in your comments is "Elitist"! It is my understanding you would not even consider a motion to investigate the possibility of no budget increase. The tax base is losing money and you don't even consider their concern. Let's put it up for a referendum; let the people decide!
for real June 23, 2012 at 03:00 AM
Look around Chris: Parkland 3.67% tax increase http://www.lehighvalleylive.com/lehigh-county/index.ssf/2012/06/parkland_school_board_oks_tax.html Some things Parkland did: Freezing teachers’ salaries, using more than $3 million in cash reserves and cutting staff were just a few of numerous steps taken to minimize the tax increase -http://www.wfmz.com/news/news-regional-lehighvalley/No-public-outcry-as-Parkland-board-approves-3-67-percent-tax-increase/-/132502/15167026/-/1hi81w/-/index.html Easton 2.2% tax raise http://www.lehighvalleylive.com/easton/index.ssf/2012/05/easton_area_school_board_passs.html To balance to the budget, the district raised taxes, cut staff and pulled $1.5 million from its reserves. Programs were not cut, but Cheston Elementary School’s full-day kindergarten will now be half-day. Staff cuts include 49 teachers, 31 full-time support staff positions, 21 part-time support staff positions, and one in-school police officer cut through attrition Salisbury 4% tax raise http://www.lehighvalleylive.com/lehigh-county/index.ssf/2012/06/salisbury_township_school_boar_6.html Allentown is about 5%http://articles.mcall.com/2012-05-25/news/mc-allentown-school-budget-0524-20120525_1_teacher-pensions-allentown-school-taxes-pension-system
taxed-enough June 23, 2012 at 03:57 AM
Chris, Thank you for your comment. Referendum would be the best way to handle these problems, by letting voters decide. Nice comment.
for real June 23, 2012 at 04:13 AM
Agreed tax enough. I also think we should have a referendum on military spending, prescription drug plan for seniors, to extend or not extend the bush tax cuts, foreign aide to Pakistan, Corporate tax cuts in the state budget, Cyber school funding, privitization of the liquor industry, How much we need to pay into the NIZ, etc.
Chuck Ballard June 23, 2012 at 04:30 AM
Sorry you feel speaking the truth is elitist. Over my time on the school board, I have voted 3 times for zero increase budgets, when the expenses were balanced with the revenues. I have also stated time and time again that one-time revenues should only be used for one-time expenditures. Using one-time money, especially one-time money that isn't really available, to balance a budget is dangerous, and in the case of the proposals made so far by EPCAT or CEPTA, whatever they are trying to call themselves these days, just plain stupid. I'm not going to make stupid decisions just to make someone politically happy. If you want a zero tax increase budget, put your money where your mouth is and propose what programs you want cut to achieve that. And don't start with sports, or claim that 'Taj Mahal' stadiums are something that would achieve that goal. Less than 1% of the budget is spent on such things. You need to cut 2-3%, or more. That means you have to cut some educational program that will cause pain to someone else, and you need to man-up and be willing to tell that person that they are not going to get the services they got next year because you do not want to see any tax increase. Don't talk about seniors losing their homes either, because East Penn provides for deserving low income seniors by providing a matching tax rebate meaning they get TWICE what the state gives them back in real estate tax rebates. Or just admit you don't want to be paying anything.
Giovanni Landi June 23, 2012 at 04:42 AM
Mr. Ballard If you think one time funds shouldn't be used to balance the budget then why did you approve a budget that uses 4 million dollars of one time funds to balance the budget? Why didn't you give the superintendent the same lecture you just gave us since that's exactly what he proposed? Shouldn't you be instructing the superintendent that the 4 million dollars needs to be raised through a tax increase not from the surplus?
Chuck Ballard June 23, 2012 at 05:07 AM
Neither I, nor any individual member of the board, 'instructs the superintendent'. A board vote tells the superintendent what to do. I made my comment that using 4.1 million was dangerous. Using more of the fund balance than that would be suicidal. I was also quoted on that comment in the news also. Using one-time funds other than the fund balance to do anything with the budget is just plain stupid. The final budget hasn't been proposed or voted upon yet. You may have to live with danger. You don't have to live with stupidity.
ted.dobracki June 23, 2012 at 12:32 PM
I don't really believe that the administration is proposing a budget that plan would spend $4 million of the fund balance, or that the school board would approve such foolishness. At the May school board meeting, Mr. Alan Earnshaw said that they are planning the $10 million balance (a one-time resource) in less than 3 years, and I read in the paper that the superintendent echoed with similar remarks at the first June meeting. If true, that in itself would be disasterous and suicidal. But that is exactly what is in the budget. In fact, it could be worse if they need to spend any of the reserve. But, I DON'T THINK THIS IS THE REAL PLAN. There's more to this than meets the eye. After all, the budget approved last year (for the school year now ending) also had an alleged $3+ million dollar deficit, and the one before that had a $2+ million deficit, even if none of the $5+ million of the reserve was spent in either year. Has EPSD really been spending down the fund balance every year? If so, it would all be gone by now! It isn't. EPSD projects a $10 million begining balance this year, even though last years budget showed ending with only $0.02 millionalong with a $5 million reserve. How is that happening? One can only conclude that it's doubtful that any of the stated $4 million deficit will be spent next year. Nor will any of the official $6 million reserve be spent, either, since it is rarely touched.
ted.dobracki December 06, 2012 at 02:38 AM
New info: Ending fund balance for EPSD in 2011-2012 is $15.04 million, adding $3.23 million 2011-12 operating surplus to its beginning fund balance of $11.81 million. This is in spite of the facts that the 2011-12 budget showed a $3 million deficit (actually almost $9 million, if you include the $5.7 million reserve). The results show a $3 million surplus, instead. Looking forward, the 2012-13 budget shows a $10 million deficit, which includes a $6 million reserve that isn't intended to be spent. Making predictions can be dangerous, but based on recent history, the remaining $4 million deficit will almost surely turn into a multi-million dollar surplus again, and a $16-18 million fund balance at the end of 2012-13 is not out ouf the question. (Last spring, I predicted $14 million, and new numbers that have been published recent exceeded my expectations by $1 million). This is in direct contradiction to comments made by some on the board, who said that the fund balance would be consumed in less than 3 years under the budget that the board approved. Do they truely understand the implications of what they are saying? Are they that clueless? Or are they trying to create a false impression of dire circumstances?
Steve Godusky December 07, 2012 at 12:17 AM
Great comment. These people like to make comments but hide behind screen names, how cowardly.
ted.dobracki December 07, 2012 at 04:32 AM
@giovanni - good point about rebating excess fund balance. the school board wouldn't need to cut taxes to do that which could put them behind the eight-ball due to the index limitation, which might not allow them to catch back up the next year. In fact, the board could raise taxes by the index amount to keep revenue matched with spending and simultaneously rebate the excess fund balance, if it was deemed to be too high. Two separate transactions, but put it all on he same bill, so it doesn't cost anything to execute, like mailing a rebate check would. Indeed, the Lehigh COunty executive made a very similar proposal in his initial budget proposal during the summer. He called it an expiring tax credit. See:http://www.lehighvalleylive.com/lehigh-county/index.ssf/2012/08/lehigh_county_no_tax_increase.html

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