DuBOIS — With DuBois Area School District directors expected to approve the 2020-21 final budget later this month, Business Manager Jeanette Buriak said there are local revenue source questions as a result of the coronavirus pandemic.
Local revenues make up about 43 percent of the district’s total revenue stream, Buriak said. The largest source of local revenue is real estate taxes, with the second largest source being earned income tax.
“Our real estate taxes, we may have lower assessments and collection rates,” she said. “Earned income tax, which is directly related to income with people being unemployed, this could directly affect this income category for the next six months or better.”
Additionally, Buriak said if home purchases are down, the transfer tax is going to be lower and investment rates are drastically lower.
“The last time we had this type of a crash was back in 2008,” she said. “At that point, rates declined over several years, but in 2020 they fell immediately.”
With regard to real estate taxes, Director Mark Gilga asked if “there is any type of figure on all of the ones that” did the reassessment and how much the district may be losing.
“I don’t have that in this budget presentation, Mark,” said Buriak. “I can tell you that between all of Clearfield County and all of Jefferson County, the assessments are lower in both counties by about $2 million.”
Buriak presented a chart to show the historical changes which showed a deep decline in 2008 during the H1N1 pandemic.
“It took three years to climb out of that and right now we are looking at something that has hit faster and deeper than that in 2008 so I don’t know how far that will climb or how quickly the change is going to happen on the upside when we are allowed to go back to normal,” said Buriak.
Buriak outlined concerns with state revenue, which makes up 54 percent of the district’s revenue.
“We’ve been told that we will get what’s called hold-harmless for our basic ed and our special education subsidies, which means that they’re going to take a year and say you will not get less than this year, but we don’t know what year they’re going to use as our base year,” said Buriak.
“One thing that I want to say, which we’ve talked about before, is no increase is the same as a decrease for us,” said Buriak. “As our expenditures go up and certainly with special education where that subsidy is directly spent on special education, those costs go up. So if our subsidies don’t go up or even slightly keep in pace with the expenditures allocated to that, it’s the same as a decrease for us.”
She said the difference between 2018-19 hold-harmless or 2019-20 hold-harmless would be about $400,000 with basic education and a $55,000 difference for special education.
With regard to the district’s property tax relief allocation, Buriak said the district has been told that it has been allocated there will not be a reduction in 2020-21. She said it’s unclear what 2021-22 will look like as gaming facilities are not operating right now.
Regarding the district’s transportation subsidy, the CARES Act states that the district will receive 2020-21 subsidy based on the allocation of 2019-20 counted as a full year of transportation. But, she said, there is some question as to how that calculation will be made. The district does not know if the full year calculation will be based on 180 days or 130 days.
For federal revenue, Buriak said CARES Act funding shows there will be a governor’s emergency education relief fund.
“We don’t know how that’s going to be distributed, whether it’ll be in the form of grants or whether they’ll be a competitive nature,” said Buriak. “(Superintendent) Wendy Benton and her team has worked really hard to go after every grant that even we could even remotely get and some that we probably didn’t have a shot at. We have tried for everything and we will continue to do so.”
“I expect our federal revenue to go up and that’s why you see it 2021 the one revenue strain that is going up because quite frankly the federal government is going to have to send money our way and send money to our states in order to help,” said Buriak.
The state is projecting as much as a 10 to 12 percent shortfall, said Buriak.
“If that’s actually the case and if they’d pass it onto the school districts, that would mean a $3.7 billion cut in our state revenue for next year,” she said.
“I think this is the first time for me as the business manager to be so unsure about the revenue side of our budget,” said Buriak. “It’s usually the expenditure side that we look at so very closely so this is a different position for us all to be in.”