PR Schools Budget Analysis Shows Widening Gap Between Income and Expenses

The Pine-Richland School Board already is looking at next year's budget, millage rate and a long-range forecast that shows expenses outpacing revenue.

Dana Siford, director of finance and school services, presented budget figures (see pdf in photo box) and reviewed the budget process Monday night for the board's finance committee.

On a graph showing budget figures from 2010 to 2018 is a divergent spot located above the year 2013 where the red line of expenses crosses over and rises above the blue line of revenue.

Siford also presented preliminary budget documents that factor in a 2 percent millage increase, which is the maximum amount allowed by the state.

"I did include the 2 percent tax increase ... just so we have somewhere to start from," Siford said.

Tax Increase?

It is too early to tell if or how much taxes will be increased.

If the school board wants to raise the tax rate higher than the 2 percent maximum set by the state, it must ask for the state's permission as part of a complicated budget process.

To make things even more complicated, the school board first must lower the millage rate to account for the county's reassessment.

Siford said the school board will follow a formula to reset the millage rate, but that cannot be done until she gets certified reassessment numbers from Allegheny County in January.  

From that point, the school board discusses setting a tax rate for the 2013-14 school year.

Timeline

By the end of January, the school board has to decide whether to adopt a resolution indicating it will not raise the tax rate more than the 2 percent maximum.

Otherwise, the board must make a proposed preliminary budget available for public inspection and ask the state for an exception to the 2 percent maximum.

Gap Analysis

Siford's budget projections show the district's expenses could outstrip revenue and fund balance by as much as $12 million by the end of 2018.

To come up with that figure, Siford estimates that expenses will be higher than revenue by $6.2 million and the fund balance will be minus $5.9 million.

Alternative Revenue

As the school board looks for alternative sources of funding, Siford also pointed out that the district has a policy in place that allows it to accept advertising. She noted the board could consider charging fees for naming rights to its stadium, auditoriums or other large areas. 

The finance committee also briefly discussed the possibility of working with the nonprofit PROF to raise funds for the district.

Finance committee members asked questions during the hourlong meeting, but did not discuss the budget projections at length. 

Did you know the school district's budget process for 2013-14 has started already? What do you think the Pine-Richland School Board should do about any budget shortfalls? Tell us in the comments.