Letter to the editor: Raising Penn Hills School District taxes was necessary
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As a group of locally elected officials, we wanted to offer a unified response to those who seem quick to criticize without fully understanding our recent decision to raise local real estate taxes for the 2022/23 school year.
While some may have forgotten the shame and embarrassment imposed on our community following a comprehensive audit performed by former PA State Auditor General Eugene DePasquale in 2016 and the eventual placement of Penn Hills School District in Financial Recovery Status in 2019 by the Pennsylvania Department of Education, our community continues to deal with the very real consequences that follow poor decision-making that cannot be readily undone.
Regardless of the investigating body involved from 2015 and beyond, findings have been comparable: Penn Hills School District was in no financial position to construct brand new schools in 2012 and 2014. As we know, this fateful decision continues to haunt our entire community. We have been assigned a Chief Recovery Officer and are now bound by the Financial Recovery Plan and Amendments that prescribe the next steps in our recovery process. One of the most significant components of these directives includes a new policy that dictates under what conditions a tax increase must be considered. Those conditions not only reference the present state of affairs, but also factor in future projections that are likely to affect our district’s financial liability.
To that end, Penn Hills School District has moved from a negative fund balance of almost $19 million as of June 30, 2015, to a positive fund balance of more than $7 million as of June 30, 2021. This positive gain of about $25 million over a six-year period would not have been possible without local taxpayer support. Unfortunately, this gain alone will not qualify our district to be released from Financial Recovery Status. We are being advised that reinstatement of local control will not be recommended, minimally, until we can maintain a minimum 5% of our district’s annual expenditures as unreserved fund balance over a period of three consecutive years.
Realistically, if we are able to maintain a minimum fund balance of about $4.9 million throughout fiscal year 22/23, we will have met that target. If we drop below that fund balance threshold, the three-year clock starts again. Additionally, we must be able to demonstrate consistency in terms of balancing expenditures with revenues that are not from non-recurring sources. While we are approaching this latest milestone, we are not there yet. We remain hopeful, however, that the new Harrisburg budget will include subsidy increases that will be recurring in nature and help us to check this next box, too.
Like you, each member of the Penn Hills Board of School Directors is a local resident who shares the tax burden that is necessary to help complete our recovery. As a governing body, we have made a commitment to be as fiscally prudent as possible and to avoid the imposition of huge increases that will maximize financial hardship. The modest tax increase we unanimously approved for 22/23 will be mediated for most homeowners by this year’s homestead farmstead exclusion proceeds. We thank you for your ongoing support of our efforts to move our district in a positive direction and help restore local control.
Erin Vecchio
President, Penn Hills School District Board of School Directors