To better understand how national events create local consequences, one need look only as far as the Pottsgrove (PA) School District.
With the nation’s economy faltering, fewer goods and services are being sold. That causes companies large and small to lay off workers. Reduced household income causes home owners to default on mortgage payments, creating more foreclosures and slower home sales.
The cascading decline in income, property, and other taxes means fewer federal dollars are available to help states make their ends meet. Fewer state dollars are offered to schools and municipalities. They, in turn, “may be in for a struggle going through the budget process this year,” district Business Manager David Nester told the Board of School Directors during its meeting Tuesday (Oct. 28, 2008).
Nester’s acknowledgment was in response to board questions on the current status of district revenue and tax collections. Real estate tax revenues seem fine, he said. The district received a “typically large” percentage of its money from taxpayers who took advantage of early-payment discounts, and has been aggressive in pursuing delinquents. Interest income earned on investments is down because of lowered rates, Nester noted.
How much financial assistance the state will supply, however, is open to question.
Between July and September – the first three months of the current fiscal year – state revenues were nearly $300 million below expectations, the Pittsburgh (PA) Post-Gazette reported Monday (Oct. 27, 2008). It said state legislators fear the shortfall could be between $1 billion and $2 billion by June 30, 2009, when the fiscal year ends.
In the lastest example of trickle-down trouble, Gov. Ed Rendell asked state universities to be prepared to give back $22 million unless Pennsylvania’s finances improve, the Harrisburg (PA) Patriot-News wrote last week. Spending cuts of between 4 and 5 percent are likely in other previously budgeted items as well, including those for schools, state Senate leaders told Allentown-based WFMZ-TV earlier this month.
Like other school districts in the greater Pottstown area, Pottsgrove has been working on its 2009 budget with administrators, board members, department heads, and building principals for several weeks. Preliminary budget documents are expected to be unveiled and dissected during upcoming board meetings.
Related (to the Pottsgrove School District Board of Education meeting Oct. 28, 2008):