Is Great Valley Eligible for Act 1 Exceptions?

Stay within the Act 1 budget index, or apply for permission to exceed it?

Each year since the 2006 passage of the Taxpayer Relief Act, school districts across Pennsylvania have debated that question.

This school year, however, some Great Valley School Board members have questioned whether the district is eligible to even apply for the exemptions. At a December 2011 meeting, school board member Bruce Chambers explained his reasons.

"Both the guidelines and the statute plainly say that school district may, without seeking voter approval, increase the rate of tax by more than the index if all of following apply, and they list two conditions," Chambers said.

"The first condition is that the revenue raised by the allowable increase under the index is insufficient to balance the proposed budget. Well, I would say that we can balance budget with the index. ... We've heard here that that's possible to do with the reserves. ... So my position is, we shouldn’t be applying. We don’t even need that money to balance that budget. We can use reserves to balance it. [...]

"Lastly, if you go to the Opt Out resolution, regarding staying within the index, there’s a phrase there that says, 'Various tax levies and other revenue sources will be sufficient to balance budget for next fiscal year.' So, we can say yes to that. We can do that. It says it right there on the resolution for opting out. For all those reasons… it appears to me that we shouldn't even be asking for the exceptions. I'd like to hear from the administration."

Board member Ted Leisenring concurred, saying, "It’s amazing, it's been in front of us all this time that there’s a requirement we’re not meeting."

Board member Jennifer Armstrong said some of the reserve fund is already designated for projects: "From what I see on this capital reserve fund, in five years we're going to be negative on the capital reserve. Which means, if we replace the roofs that we think we'll need to replace and we do the parking lots that we think we need to do, we're not planning on putting any more money in capital reserve. ... $10 million of what's in capital reserve is already slated to be spent."

Board president David Barratt said that the board needed clarification on the law. Chambers re-read the salient portions from a sheet in front of him, and asked business director Charles Linderman if there was something he was missing.

Linderman said the legislation was meant to meant to ensure districts have the proper balance of reserves, education, revenues and expenditures.

"To interpret the Act 1 the way you are, Bruce, essentially, probably two-thirds of school districts across the Commonwealth would have been in violation last year. I don't believe that was the case or the spirit of the legislation passed," he said.

Leisenring responded by saying that just because everybody does something, doesn't make it right, and encouraged residents to start petitions to express their thoughts to the Department of Education.