At its April 19 finance committee meeting, the BASD board heard an update on the budget for next year, a report on the 2011 General Obligation Bond by Public Financial Management Managing Director Scott Shearer, and a presentation on a new legislative initiative for education funding called Level Up PA.

Shearer explained that the district has an opportunity to refund a series of bonds issued in 2011 this upcoming November, during what he hopes will still be a relatively low interest rate environment. According to his “conservative” estimate, the district could save $2.516 million in interest by refunding the bonds in November. The next step for the board, if it chooses to pursue this action, is to adopt a resolution to set parameters for the transaction at its May 24 meeting, preparing to lock interest rates in by early July. (The district also has more than $100 million in outstanding floating rate debt, which Shearer plans to return to discuss with the board this summer. The debt summary for BASD is available online: https://go.boarddocs.com/pa/beth/Board.nsf/Public)

Chief Financial Officer Stacy Gober asked Shearer how the federal ESSER funds will affect the bond rating the district is likely to receive from Moody’s this summer. He indicated that ratings agencies have not yet made a statement on how federal fund availability will affect bond ratings; however, in a separate action, Moody’s did adjust its formula for all Pa. school districts.

Executive Director of Education Voters of PA Susan Spicka described the Level Up PA initiative to the board. Essentially, it highlights the burden on local property taxpayers in Pa. relative to state education funding.

Although a bipartisan Basic Education Funding Commission-informed 2016 state law created a Fair Funding Formula (FFF) that theoretically sends more state tax dollars to districts with greater need, the “hold harmless” provision undercuts the intent of the law. As board member Dr. Karen Beck Pooley pointed out in an op-ed last year, districts are “held harmless” as long as they receive no fewer state education dollars than they did the prior year. This generally results in only “new money” (budget increases) being distributed according to the FFF, with less wealthy school districts being left behind.

In the case of BASD, the district receives $20 million less in funding from Harrisburg than it would if all state education funding were distributed according to the FFF.

At the meeting, Spicka advocated for the public’s support of Pa. House Bill 1167, which would appropriate $100 million in additional funds for the 100 most underfunded (lowest 20 percent) school districts. If HB 1167 became law, BASD would receive $1.6 million in supplemental funding. The board was to vote April 26 on a resolution urging the state general assembly to vote this “Level Up” bill into law. (More information on the methodology used to determine the 100 most underfunded districts is available at www.LevelUpPA.org)

Gober provided an update on the in-progress budget, noting that the deficit is currently just over $8 million. This shortfall is despite the district’s plans to use federal and state funds (ESSER II, ESSER III and GEER) for pandemic-related technology and sanitizing needs, as well as remediating learning loss.

In response to a question by board member Dean Donaher, Gober said that raising taxes 3.7 percent (the maximum permitted by Act 1) would bring in an additional $6.7 million, an increase of 2 percent would bring in roughly $4 million, and a tax increase of 1.5 percent would amount to about $3 million. Superintendent Dr. Joseph Roy suggested using $4 million from the district’s fund balance and increasing tax millage by 2 percent, with the possibility of adjusting the tax increase downward before the final budget if other means emerge to narrow the $8 million gap. A proposed budget will be adopted May 10, with final budget adoption in June.

In addition to the Level Up resolution, the board was to vote at the April 26 meeting on several finance items, including renewals of a food service contract with Aramark, Sapphire School Nurse software licenses, and licenses for the software the district uses for school registration. All items for the April 26 meeting were available online.