LOWER POTTSGROVE PA – A $6.4 million fund that the Pottsgrove School District has amassed over several years, in anticipation of the need to offset increasing retirement plan payments demanded by the state, may instead be used in an expanded way during the next budget year in an attempt to keep property taxes from rising, according to district Business Administrator David Nester (at top).
The money has been accumulating, saved periodically by the Board of School Directors, in case Pottsgrove faced big payment spikes from the Pennsylvania Public School Employees’ Retirement System. PSERS, as it’s known, governs the pension plans that cover a majority of Pottsgrove employees.
When the economy flattened during the late 2000s, and stock portfolio and interest earnings dropped dramatically, PSERS faced huge unfunded pension liabilities. As a result, it demanded significantly higher payments annually from participating districts to make up the difference. Some publicly claimed the PSERS drain on their budgets threatened their solvency.
Pottsgrove, at Nester’s suggestion, created the dedicated fund to ensure retirement bills could be paid.
However, the district has benefited from budget surpluses over many years, due in large part to Nester’s guidance, directors readily acknowledge. Money salted away in its PSERS fund has been used primarily to eliminate deficits in Pottsgrove’s own annual budgets. Just last week, the school board voted to recommit $375,000 to the fund it had planned to use, but didn’t need, to fill a 2016-2017 budget gap.
During its Oct. 24 (2017) discussion over the board decision, director Rick Rabinowitz asked Nester if the district could use more of the untapped PSERS money to help reduce tax burdens on district property owners. Nester agreed, and added he expected “to get more aggressive with that this year.” Directors “will see it reflected” in proposed 2018-2019 budget numbers during the next seven months, he said.
It’s unknown whether using that cash would actually reduce taxes, keep them unchanged, or simply prevent far higher rates.
In earlier overviews, Nester has predicted the coming budget year could be difficult to navigate in light of the state Legislature’s past failures to provide accurate figures on education subsidies, an improving economy with slowly rising interest, and unknowns like the cost of special education and charter school tuitions.
Related (to the Pottsgrove Board of School Directors’ Oct. 24 meeting):
- PSERS Fund Cash May Find New Budget Purpose
- Pottsgrove Schools Renew Security Contracts
- After-School Tutoring Provided For Grades 3-5
- School Board OKs 10 Special Payment Positions
- School Board In No Hurry To Spend Surplus
- How To Use The Money? No Shortage Of Ideas
- How Will Pottsgrove Use Extra $1.17 Million?
Photo by The Post Publications