Quakertown Community School District projects $15.16 million deficit; board weighs tax-increase options

Dawn Young, the district business administrator, told the board at its April 14 budget workshop that a preliminary budget summary “basically gives us a $15,160,000 deficit,” and that the draft budget includes a 0% tax increase at this time.

The presentation matters because the district must file a proposed budget at its April 24 meeting and the board is considering whether to present one or more real-estate tax options to voters. Young said the estimate includes the district’s budgetary reserve and noted state revenues remain uncertain: “the state budget is not finalized.”

Board members and district leaders discussed a range of tax-rate scenarios and the likely effect on an average homeowner. Young said the district’s average assessed value is $29,161 and the current average tax bill is $5,022; using the district’s figures, she said a 1% tax increase would add about $50 annually to the average bill, 2% about $100, 2.5% about $126 and 3% about $151. Board members discussed options up to 4% during the workshop.

Several board members urged caution about high, single-year increases while others said modest, multiyear increases are fiscally responsible. One board member noted neighboring districts have approved increases in recent years, and another asked the administration to model the effect of steady annual increases (for example, 2% per year) on the fund balance over a five-year horizon so the board can see whether smaller, recurring increases would stabilize finances without exhausting reserves.

Administrators reiterated that some expenditure savings have already been found — Young identified roughly $1.8 million in expenditure decreases since the April 2 workshop, including about $760,000 in salaries and benefits reductions — but said final March revenue data and the state budget could change the picture. Young also reminded the board that the district typically does not budget for possible increases in state funding and that the tax-duplicate (final assessed values) is not yet available.

The board and administration also discussed the district’s fund balance. Young said the audited fund balance for 2023–24 was about $39 million and that the district typically holds a multi-month reserve; she described a preference for keeping reserves at a fiscally prudent level but noted the fund balance is projected to be drawn down to cover operating shortfalls if tax increases are not adopted. A district staff member said a three-month operating reserve is a common target, and that drawing down reserves may affect the district’s credit profile when it seeks to borrow for large capital projects.

No formal vote on a final tax rate was held at the workshop. Young said the board is required to adopt a proposed budget on April 24; the administration will present the proposed budget and draft motion language so the board can move forward at that meeting.