Gateway faces $3.6 million deficit, plus pandemic losses

The Gateway Board of School Directors is faced with a deficit of approximately $3.6 million as they work on the district’s 2020-21 budget — but that’s before projected losses expected because of the coronavirus pandemic.

The school district’s business manager, Paul Schott, said during the board’s virtual May 12 study session meeting the financial impact of the pandemic to the district could add another $1.7 million to the deficit, potentially swelling it up to $5.3 million.

To fill the gap, school board members were given some options, including using unassigned fund balance money, raising property taxes or making additional cuts to programs and initiatives.

The pandemic’s financial impact to the district was estimated by Schott to be anywhere from $1.3 to 1.7 million. He said he used figures developed by the Pennsylvania Association School Business Officials, a coalition of school districts.

The PASBO said in April the state’s 500 school districts could lose up to $1 billion or a loss of up to 5% in local revenue.

Schott said knowing the full extent of the financial impact to the district won’t be known until Allegheny County begins to open back up. Gov. Tom Wolf moved the county, along with several others in Southwest Pennsylvania, into a “yellow” phase Friday as part of his tiered reopening plan.

The state has not yet set a timeline for moving any counties from yellow to green.

Pandemic impacts aside, the deficit is caused by a projected $2.8 million loss in revenue and a $757,000 increase in expenses when compared to last year’s spending plan, Schott said.

If the board raises taxes by the full 3% allowed by law, Gateway will have a millage rate of 20.4635. Right now the millage rate sits at 19.8675, the 14th lowest rate in Allegheny County.

The last time Gateway increased property taxes was in the district’s 2018-19 fiscal year, Schott said.

The tax increase would mean the owner of a $100,000 home would owe around $60 more a year, or $5 a month.

However, the school district might be forced to fill the gap without a property tax increase. A proposed state law, still under consideration by the House, would bar Pennsylvania school boards from raising property taxes this year because of the coronavirus pandemic’s financial impact to residents.

“We’re making adjustments, as we typically do this time of year,” Schott said. “We’re trying to react to all the information that is coming in — some positive, some negative.”

Board President Mary Beth Cirucci called the district’s situation “unprecedented” in an email.

“The best solution will be one that distributes cuts among all areas so everyone bears the burden,” she said. “Tax increases are never something taken lightly and the board recognizes that.We we are in a time of high unemployment and could be facing loss of businesses in our community as well. My hopes are, as we enter the yellow phase, in a few weeks we may have a better picture of what cuts we need to make.”

During the school board vice president’s report, Rick McIntyre said it would be “unconscionable” to raise property taxes during this financially difficult time and said cuts are likely.

“Unfortunately, we’re going to be looking at some pretty heavy and pretty painful cuts here, for the next year or two,” McIntyre said. “And when I say that, I mean there is absolutely nothing off the table.”

Below is a video recording of the school board’s May 12 meeting. It can also be accessed on the district’s YouTube channel by clicking here.

Residents will have the chance to address the school board with questions and comments about the budget during a May 21 meeting in which officials will discuss the budget through the staffing and personnel lens, which comprises around 70% of the district’s overall spending plan, Schott said.

The last public hearing on the budget is scheduled for June 2. The board will approve a final, balanced budget June 30.

Both the May 21 and June 2 meetings will be held virtually, beginning at 6 p.m.

Instructions on how to join the Zoom meeting will be posted to the district’s website before each meeting starts. Questions and comments can be submitted through the Zoom Q&A feature or by email at gsd_schoolboard@gatewayk12.org or by phone at 412-457-0665.