The Herald, Sharon, Pa.

May 20, 2013

District reserves to cover $500,000 shortfall

By Felicia A. Petro
Allied News Senior Reporter

MERCER — Although Mercer Area School District has a $500,000 shortfall in its budget for the coming school year, school directors do not plan to raise taxes.

Members will give a final vote on the budget tonight; the proposed budget was approved last month, said Dr. William Gathers, superintendent.

The budget stands at $16,309,057 in expenses and $15,810,312 in revenues, said Mike Stabile, business manager.

The $498,745 shortage has been due to “a number of things, but one of the biggest ones is the substantial increase in the retirement system,” Gathers said.

The state determines what school districts must contribute, added Cedric Butchy, board president. Furthermore, “This is the last year of the teachers’ contract. We spend more paying people than anything else,” he said.

Another shortfall in Mercer’s budget is the state has only projected subsidies at about $81,000, Gathers explained. “After what we were given two years ago, we were cut almost $1 million and last year we had zero,” he said.

“Every school district is struggling,” Butchy noted. “Everybody feels the same way. It’s another year, and there’s nothing from the state at all.”

“There’s a lot of debate raging now with school funding,” Gathers said, and the district could see more subsidy money when the state is set to pass its budget at the end of June.

However, “We have to pass ours now. We’re floating in limbo now,” the superintendent said.

Under a formula by the state – called the Act 1 Index – Mercer schools could raise taxes by over 2 mills, but the school board chose not to use it as of last month’s meeting, Gathers said.

“We’ve never increased millage to the index. We increase when necessary,” Butchy said. “We’re all taxpayers, too, and nobody wants to pay more in taxes.”

The district plans to pay for its shortfall by pulling from its fund balance, Gathers said. “There used to be a substantial amount (of subsidy) from the state and our school board doesn’t feel the locals should have to pay that burden.”

Butchy added: “We don’t have a huge fund balance and hope things work out that you don’t have to go that far in the fund balance. Don’t overestimate expenses and don’t underestimate. Nobody likes to spend their savings ... at home or in a school budget either. We try to limit tax increases and spend money wisely.”

Gathers did not recommend increasing property taxes to the board, he noted.

“They’re enlightened enough to our financial situation,” said the superintendent, who agrees with the board in not raising taxes.

“Not all schools have the same tax bases,” Gathers said. “Others struggle more financially than others. We would not consider ourselves an affluent school district and we’re doing the best we can.”