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KCSD finance staff proposes 2.81% preliminary real‑estate tax increase; assessment appeals create $340,000 gap
Summary
District finance staff presented a draft preliminary budget that would raise real‑estate taxes 2.81% under Act 1, report no new staff positions in 2025‑26, and flag two large tax assessment appeals and a possible municipal earned‑income tax as risks that together could create roughly a $340,000 shortfall.
Mr. Tracy, district finance staff, presented the Kennett Consolidated School District’s draft preliminary budget and estimated tax rates to the finance committee as preparation for a full board vote on the preliminary budget scheduled for next Monday.
Key points: the presentation proposes a 2.81% real‑estate tax increase (within Pennsylvania’s Act 1 4% threshold), does not include any newly proposed full‑time positions for 2025‑26, and reflects a $541,000 reduction in annual debt service tied to lower‑than‑expected construction costs and additional grant funding described during the meeting.
Tracy told the committee the draft budget assumes a total operating budget of about $107 million and local revenues of roughly $82 million. He said the district is not currently seeking referendum exceptions under Act 1.
The presentation flagged two sizeable pending real‑estate assessment appeals as material risks to the tax base. Tracy described appraisal reports and county assessments for two properties associated with Genesis Healthcare and Kennett Center LP; the district’s review shows potential local tax revenue losses of about $213,000 for one building and $128,000 for the other, for a combined gap of roughly $340,000 if settlements are accepted at the appraised values discussed in the meeting. Tracy said the district’s legal and appraisal teams are negotiating settlements and that repurposing of those properties (to residential uses) could yield future assessment gains in a few years.
The committee also heard that East Marlborough Township is considering enacting an earned‑income tax. Tracy said that change, if enacted, would affect collections the district currently receives from that municipality and that analysis shows any impact would likely be felt in fiscal year 2026‑27.
On state and federal funding, Tracy said the draft budget includes a modest 2% increase in Basic Education subsidy, while special education and transportation subsidies were held at level funding in the preliminary figures because of enrollment dynamics. Tracy noted the district’s Social Security and retirement reimbursements from the state will change with salary assumptions. He also said the district expects to receive federal Title grants this year (Title I–IV) and estimated the current federal funding tied to Title grants at about $1 million; he cautioned that federal funding streams remain under review at higher levels and could change.
Tracy summarized the budget timeline: the finance committee review, a preliminary budget presentation to the full board next Monday (preliminary budget approval is expected then), a proposed final budget review in April and final budget adoption in June.
Board members asked for clarifications about interim tax revenue sources and construction‑related assessments — including a planned Wawa and other pad‑site development along Route 1 that could increase interim tax receipts — and asked staff to continue reporting new assessment developments and state budget details as they are released.
