In its first budget draft for next year, Burrell School District proposed a roughly 4% real estate tax increase that would largely foot the bill for growing special education and cyber charter tuition costs.
Rising expenses and loss of business property tax revenue continue to hurt the district, school board President LeeAnn Guido said.
The proposed revenue for next year is $38.7 million, and the estimated expenses sit a bit over $39 million, creating a roughly $418,000 deficit the district will have to close before a final budget is passed in June. The increase would take the tax rate from 122 mills to 127.3 mills.
The draft’s estimated expenses are nearly $1.7 million more than last year’s budget of $37.4 million.
Local revenue makes up 58% of the district’s money, much of which comes from real estate tax. It also relies on state funding for 41% of its revenue and federal funding for 1%.
Guido said the board and school administration are looking for creative ways to save money before a final version of the budget is passed in June.
The district’s ultimate goal is to cut costs without negatively impacting students, Guido said.
“The board recognizes that the cost of everything is going up. … We recognize that there are plenty of people on fixed incomes and tax increases are hard,” Guido said. “We’re sensitive to all of that. But at the same time, we have to do what’s best for our kids.”
Mounting costs
The draft budget estimates special placement costs for next year will increase by about $420,000.
Special placement is when students are enrolled outside of Burrell district buildings, including special education facilities, approved private schools, partial hospitalization, behavioral facilities and alternative education centers.
The district has 18 students enrolled in such programs, according to the budget.
In-house special education costs are estimated to rise by $183,000, which would include any services or aid provided to students at Burrell buildings.
The combined cost for special placement and in-house services is about $2.4 million.
Rising costs also come from cyber charter school tuition, which the state requires public school districts to pay.
Tuition ranges from around $7,600 to nearly $29,000 per student.
In November, the state adjusted the cyber charter tuition formula, allowing public districts to deduct more expenses — a move Gov. Josh Shapiro estimated would save $175 million cumulatively for the state’s 500 public school districts.
Still, Burrell’s overall cost for cyber charter schools continues to grow year over year.
The total cost for next year is estimated at about $833,000.
The budget draft estimated a nearly $132,000 increase, not including the cost of its internal online system, Burrell eAcademy.
Assessed value decrease
Over the past five years, the district has lost tax revenue because of business loss and existing businesses filing assessed value tax appeals, Guido said.
A tax reassessment is typically done to reduce a landowner’s property taxes.
Under Pennsylvania law, property owners can appeal their assessed value every year if it is greater than the property’s fair market value or if it is assessed higher than comparable properties, according to Rosenn, Jenkins and Greenwald LLP.
Since 2023, the district has lost more than $700,000 in tax revenue from businesses reassessing their property value.
“The county tends to side with the businesses, therefore lowering the assessed value of the business, which in turn significantly lowers our tax revenue,” Guido said.
There are three outstanding appeals filed in 2024, by Hillcrest Shopping Center, Siemens Technologies and Philips Respironics, which, if approved, would require the district to pay back the businesses for their 2025 taxes, Guido said.
“It’s frustrating, because who bears the burden of that? Our residents have to bear the burden of making up that difference, because the alternative is that our students have to suffer,” Guido said.
Guido said the district has been working for years with the city to attract more local business in hopes of offsetting the revenue blows.
Though the district won’t see bolstered tax revenue from the Stewart Elementary School sale for a few years, it has benefited from decreased utility costs and from avoiding costly repairs, Guido said.
It also was able to eliminate some custodial and secretarial positions and an administrative position, saving some personnel costs.
Guido said that as the budget process unfurls in the coming months, she hopes residents will attend board meetings or reach out via email with any concerns or questions.
“We want to be transparent, but people have to attend these things so they can ask questions and we can answer them,” she said.
About the proposed tax hike
Here is the effect the proposed 5.3-mill tax increase would have on a home at the district’s average assessed value of about $23,000.
A mill in Burrell School District is worth about $151,000.
Current tax rate: 122 mills
Current tax bill: $2,806 a year
Proposed tax rate: 127.3 mills
Proposed tax bill: $2,928 a year
Tax increase: $122