Lower Merion School District officials introduced the preliminary budget for 2013-14 at Monday night’s school board meeting, cautioning residents that this year’s tax increase is likely to be steeper than last year’s 1.99 percent increase.
Altogether, this year’s budget is $222,134,342, with a $7,665,709 funding gap, according to business manager Victor Orlando.
That $7.7 million gap would require a tax increase of 4.4 percent, Orlando said.
For a $250,000 home—the median household assessment in Lower Merion Township—that’s a $259 increase over last year, for a total tax bill of $6,146.
Orlando noted several major factors impacting this year’s budget, including salary increases and 16 new faculty and staff positions to accommodate enrollment growth. The district has also experienced a loss in revenue of approximately $400,000, due to a drop in assessed home values.
Additionally, this year's budget has seen a 37 percent increase in retirement contributions over last year, Orlando said. For 2012-13, the district is required to make a 12.36 percent contribution to the retirement system, but for the 2013-14 year, that figure has increased to 16.93. Orlando said it’s projected that in 2035, that contribution will be somewhere around 31 percent.
With an estimated $4.9 million increase in salaries this year, a $4.1 million increase in benefits and a $400,000 increase in other budget items, the district faces a $9.4 million increase in its overall expenditures.
Unknown at this time are the specifics of current and future tax revenues, interest income, and what state funding will look like. The state budget will be presented on Feb. 5, at which point the district will learn what kind of state funding will be available, Orlando said.
Superintendent Christopher McGinley emphasized that the district is just beginning the budget process.
“Last year’s tax increase was the lowest tax increase in 25 years, and I’m not optimistic that we’ll better that—or match it—given our current circumstances … but there’s a lot more work that needs to be done on this budget in the next few months,” he added.
The school board must approve its preliminary 2013-14 budget by Feb. 19, and is scheduled to approve the final budget by April 15, with a June 10 adoption date.
Last year at the preliminary budget stage, a 3.9 percent tax increase was proposed, and eventually reduced to 1.99 percent.
See the full budget presentation in the attached PDF.