As the North Penn School District prepares to vote Thursday evening on a proposed $207.6 million budget that includes a 2.79 percent property tax increase, a new report by the PA Independent has ranked the district 14th in the state in terms of its uncommitted general fund balance, which stood at about $22.43 million last June 30, when the numbers were compiled.
According to preliminary budget documents published by the school district, North Penn's general fund balance stood at $21.14 million near the end of 2011. Across Pennsylvania, the PA Independent estimates that school districts are sitting on about $3.2 billion in savings.
Declining property values have pinched school district finances across the country over the past few years. Even after expenses are cut, many districts are forced to choose between hiking property taxes and dipping into savings.
The Pennsylvania School Boards Association advises districts to only dip into cash reserves for one-time expenditures. Pulling more than 10 percent out of savings in a single calendar year has the potential to impact a school district's creditworthiness, making it more expensive for a district to borrow money through bond issues and other measures.
The 2.79 percent property tax increase would represent an additional $83 per year for homeowners in the district, according to a May 10 report in North Penn Life. According to North Penn Life, Robert Schoch, the district's director of business administration, said the general fund balance needed to be preserved as a "cushion" to maintain the district's bond rating.
About 70 percent of the state's 500 school districts are drawing on their general reserve funds in their preliminary budgets, according to the PA Independent.
The North Penn School Board will meet Thursday evening at 7:30 p.m. at the Educational Service Center, 401 E. Hancock Street, Lansdale. School board meetings are open to the public.