Warren County School District’s early budget estimates are out.

Director of Business Services Jim Grosch presented the ‘rough-cut’ budget to the finance committee at Monday’s meeting.

The projected increases to revenues are not matching the projected increases of expenditures.

The projections are bleak. In 2020-2021, the district is looking at a shortfall of $3.5 million, then $5.7 million in 2021-2022, $8 million in 2022-2023, and $10.5 million in 2023-2024.

The growth in expenditures is largely based on projected salary and benefits costs. Typically, those two items add up to 66 percent of the budget, Grosch said.

Between the current school year and the 2023-2024 year — the farthest out on the projection — those items show a projected increase from $53 million to $60 million.

Grosch did have some good news for the committee.

The estimated deficit for the 2019-2020 is less than anticipated. “Originally $1.9 million, we’re looking at a $1.492 million loss,” Grosch said.

The district must be prepared to either give up its ability to raise taxes beyond the state’s index — 3.7 percent — or meet an accelerated budget timeline.

Raising taxes 3.7 percent equates to a little over 2 mills — about $818,000, Grosch said.

The committee found no objections to holding the line below that.

“For the last several years we have voted at the December meeting to not pursue an increase above the index,” committee chairman Arthur Stewart said. “My inclination would be to suggest that we agree to stay below the index.”

Committee members Elizabeth Huffman and Joe Colosimo agreed.

“I don’t have any problem with that,” Colosimo said. “We can’t go higher.”

The members were not suggesting that the board increase taxes.

“We’re voting on whether to exceed or not exceed, not whether there’s an increase or not,” Stewart said.

With no objections, the committee moved an item to the consent agenda for the December board meeting.

LERTA and reassessment

Without tax increases, property tax revenues are flat for the district.

A proposal by the Warren County Commissioners is intended to improve that situation by generating development or redevelopment of property in the county.

Commissioner Jeff Eggleston addressed the finance committee again on Monday.

The proposal would create a tax-free period for development in the county. Taxes on a property would not immediately increase based on improvements made.

The hope is that the savings reflected by not having to pay new taxes would attract development from outside the county and promote improvements within.

“The goal of the LERTA program is to push people to redevelop property,” Eggleston said. “We need to figure out a way to get people to do it. We’re not in a position to be stingy with how we do it.”

LERTA stands for local economic revitalization tax assistance.

He said the county has experienced ‘growth’ of 0.1 percent, 0.3 percent, 0.3 percent, and negative 0.4 percent over the past four years.

Support from the program is spreading.

“We’re at a point now where 13 different municipalities have passed the ordinance,” Eggleston said. “That represents over 25,000 residents of the county. If passed, it will represent one of the most comprehensive tax abatement programs in the state of Pennsylvania.”

The program hinges on the school board.

“You’re my last stop,” Eggleston said. “You’re the last folks that I’ve got to get on board with this thing. None of the ordinances take effect until the school district passes its resolution.”

“We are the lion’s share” of real estate taxes in the county, Stewart said.

Members of the committee asked Eggleston why they should consider a LERTA — which would create a situation in which the district would not immediately benefit from development in the county — when there are other problems at the county level that could be addressed.

Stewart cited “untimely” assessments of properties that have undergone improvements, as well as the problems that go along with not having a county-wide assessment since the 1980s.

“It’s gotten to the point where it’s 73 percent out of whack,” he said of assessment values.

“It’s not the county’s position at this point to put a discussion of reassessment on the table as part of this,” Eggleston said. “I’ve never said that we shouldn’t have a reassessment. I’m not here to discuss it. My board is not able to discuss it at this time.”

The committee did not take any kind of action regarding the LERTA, aside from asking Eggleston for answers to some questions.

Eggleston said he would discuss those questions with his board.