Can schools hold the line on higher taxes? We doubt it

Thursday, February 2, 2012

There should be no need for a tax increase proposal in May 2012, "based on what is known and what most probably will be proposed."
Those aren't our words. Rather, they represent a preliminary opinion from Roland Bechtel of Treasure Lake, a newly elected school director, retired successful business leader and avowed fiscal conservative, as posted on his Website. Bechtel and Patty Fish, a tea party adherent also elected in November, voted against a motion that would request state permission to increase taxes by up to 2.4 percent. The ask-them motion passed, but that doesn't mean that taxes will, or won't go up.
We would like to say that we share Bechtel's assessment, but we don't.
According to his rough analysis of likely expenses and revenues, the DuBois district should be OK.
But there are two huge flies in that supposedly-soothing ointment:

• Statewide, tax revenues are below estimates for this year by as much as $500 million. Gov. Tom Corbett has made it clear that he has no intention of playing the "fuzzy math" games used by his predecessor to "balance" budgets while allowing "unfunded liabilities" to mount up. And the DuBois budget was $6 million in deficit last year, a debt that was made up by dipping into the district's savings accounts, called "fund balances" in educator argot.
• The amount of money projected to be needed to pay out all the promised retiree benefits for current and future retirees in the educational system far exceeds the amounts being paid in by employees and school districts. Somebody is going to have to make up the difference, or default on the obligations.

Given the Legislature's habit of not passing a budget until the last minute (happily, a trend broken this past year), school districts might again need to guess as to the amount of state money they will be receiving, rather than having solid figures.
So we're betting that all school districts, including the DuBois district, will be looking at a distasteful choice of increased taxes or decreased spending, i.e., programs and staff, come June 30.
We would be delighted if Bechtel's optimism carries the day, and taxes do not need to be increased.
But we doubt it.
- Denny Bonavita