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Cheltenham committee reviews Act 1 opt‑out timeline and state tax equity supplement application worth $1.1 million
Summary
Committee discussed filing an Act 1 opt‑out resolution and a required board resolution for a state tax equity supplement (Ready to Learn block grant) of about $1.1 million that the district plans to use to mitigate millage increases.
Cheltenham School District staff told the Financial Affairs Committee on Dec. 10 that the district plans to file an Act 1 opt‑out notification and to attach a board resolution to its application for a state tax equity supplement, a one‑time allocation staff estimated at about $1,100,000 for the district.
Under Pennsylvania’s Act 1 process, districts must notify the state by the Department of Education deadline whether they intend to raise rates beyond the Act 1 index. Staff said the district’s current Act 1 index is 4.7% and that the opt‑out resolution must be filed by Jan. 4.
“What this resolution is just opting to the Department of Education saying our tax increase will be somewhere less than 4.7%,” said Mister Sawyer, the presenting staff member.
Tax equity supplement application
Sawyer said the district will apply for a state “tax equity supplement” (described in the meeting as the Ready to Learn block grant tax equity supplement) and that the board must pass a resolution describing how the funds will be used. Staff highlighted one permitted use: mitigating millage increases. Sawyer said the district intends to use the money to balance the budget and reduce upward pressure on millage rates.
Timing and uncertainty
Board members asked how timing affects budgeting. Sawyer said the state award timing and the annual state budget process mean the supplement could be received in a subsequent year and be treated as deferred revenue until applied; the state’s annual appropriations process also means multiyear guarantees are not certain. “It is…deferred revenue until next year until we've met that,” Sawyer said.
Discussion vs. decision
The transcript records discussion of the opt‑out resolution and the required board resolution for the state supplement but does not record a formal vote on either item during this session.
Ending
Staff will prepare the opt‑out and grant application materials for board consideration before the Jan. 4 deadline and said it will keep documentation showing how the state funds are used to meet the grant’s stated purpose.
