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No tax increase for Middletown Area School District: final budget different from May version

By Laura Hayes

laurahayes@pressandjournal.com

717-944-4628
Posted 7/1/20

There will be no tax increase under Middletown Area School District’s 2020-2021 budget, which the school board approved Tuesday.

The final version of the budget calls for $46,969,927 in …

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No tax increase for Middletown Area School District: final budget different from May version

Posted

There will be no tax increase under Middletown Area School District’s 2020-2021 budget, which the school board approved Tuesday.

The final version of the budget calls for $46,969,927 in revenue and $49,898,949 in expenses. The approved budget has a $2.9 million deficit between revenue and expenditures, which MASD plans to fill using its fund balance.

MASD Chief Financial Officer David Franklin said there were “significant” changes for the good made to the budget since it was last presented in May, including eliminating the proposed tax increase.

Prior versions included a 3.4 percent tax increase. In December, the district was projecting $48.8 million in revenue and $55.2 million in expenses, or a deficit of nearly $6.4 million.

Board members commended the work of administrators on the budget, particularly with reducing the deficit and eliminating the tax increase.

Vice President Mike Corradi thanked Franklin and Superintendent Lori Suski for their work, “especially in the uncertain times with dealing with COVID-19 and all of our staff members and all of our employees giving something up and redoing some things and getting back with you guys and working hard to come in at a zero [tax increase] budget to help our community and kids. Well appreciated.”

Suski thanked Franklin for his “diligence in crafting final adjustments to the budget resulting in no tax increase for 2021” given the revenue constraints and further expense reductions.

“I think it’s important to note that it’s highly unlikely that any non-budgeted expenditures will be approved during this school year with the exception of unforeseen student placements or special education costs that could not be anticipated,” she said.

Suski continued: “This is going to be quite a paradigm shift for teachers and administrators in our district, who often request items throughout the school year because they may have forgotten to put them in their budget documents or it may be something that comes up that they think would be wonderful to do. In the past, we’ve been gracious in trying to allow those things whenever possible, but I think we all know that we need to live within the confines of the approved budget and limit budgetary reserve use to only emergency items.”

Next year’s budget may be even more constraining than this year’s, she said.

Changes since May

According to Franklin, since May, proposed spending was decreased by $618,000.

The largest change was in MASD’s spending on supplies and equipment. The approved budget calls for spending $531,721 less.

Franklin said reduction in technology purchases is the most significant portion.

“That does not mean that we will not have technology for next school year. It’s just that we were able shift the manner in which we’re going to be providing that technology,” Franklin said.

In May, administrators told the board that it was able to implement its districtwide remote learning using iPads that are past their lifespans and planned to be sold. 

Devices needed to be replaced if MASD needed to do remote learning. During its June 1 meeting, the board voted to replace 700 iPads at the elementary school level for in the classroom when students are in the building and rent 500 more for six months (which could subsequently be renewed) if classes need to be held remotely.

On Tuesday, Franklin said the ordered iPads came in early enough to fall under the 2019-20 budget.

Most of the district’s expenses come from salaries and benefits, a total of about $32.5 million for 2020-21. Benefits are down by about $66,000, which Franklin attributed to staff’s open enrollment decisions, using budgetary reserve for sick leave payout, and reduction in tuition reimbursement after Suski asked if staff anticipated to enroll in courses, given the COVID-19 pandemic.

Franklin said salaries are down by a net $14,000.

He said this version of the budget eliminates afterschool tutoring that had been included in the May version. The tutoring was to be funded through the federal Coronavirus Aid, Relief, and Economic Security Act, but Franklin said the district’s final version of that grant budget the tutoring was removed “because we thought that there were other ways that that grant funding may be spent to the advantage of the district.”

He added that depending on what school looks like in the fall, afterschool tutoring might not be possible for MASD.

This version of the budget does add an additional reading specialist after the district received more federal Title I grant funds. Title I funds are based on the amount of students who qualify for free or reduced lunches.

MASD is projecting that its revenue will decrease by a net of $1,300 to a total of $46,967,927. Federal revenue is expected to increase by more than $600,000, including more Title I grant funds and grant funds to address COVID-19 costs.

The district is anticipating that it will receive nearly $3 million in grants, which is nearly double from December projections.

Franklin explained that in December, the district hadn’t received grant allocations and based it on what they had received that year. By May, the district was awarded a $461,596 safe schools grant and a $452,342 grant through the CARES Act.

“It’s probably important to note that some of this grant funding is one-year grant funding. It’s going to go away in future years,” Franklin said. “For the most part, we tried to be very strategic in how we used it so that the grant funding that is going to go away is used for costs that are not going to recur so that we on’t find ourselves with a hole to fill in successive years.”

The allocation from Title I funds increased by about $374,000 to about $924,000. In addition to the reading specialist, the funds will also go toward new elementary math curriculum, reading materials, software, summer school, elementary behavior support specialists, supplies for the Positive Behavioral Interventions and Supports program and parent involvement activities.

“Which was a surprise to us that the allocation went up to that extent. That is not something that was known in the May draft of the budget, but it certainly has been beneficial in closing the gap in the budget and allowing us to do some very beneficial things for our students,” Franklin said.

Revenue from the state is projected to increase by about $156,000, which Franklin attributed to the district qualifying for a transportation subsidy because it opted to pay its transportation contractors — Boyo Transportation Services and First Student Transportation — during the pandemic.

But local revenue the district was anticipating to receive from the tax increase — about $733,000 — no longer will come in with MASD removing the tax increase.