Kennett Consolidated SD finance committee previews $107.7 million proposed budget, explains homestead/farmstead tax relief

Mr. Tracy, presenting to the Kennett Consolidated School District finance committee on Monday, said the district’s proposed final general operating budget for 2025–26 remains at $107,695,765 and that major assumptions from the April proposed budget still stand.

Tracy said two “wild cards” remain: the state budget (not yet finalized) and East Marlborough Township’s possible change to earned income tax collections. The district took a conservative step by reducing its earned-income tax assumption tied to East Marlborough by 0.5 percentage points to account for a possible September enactment, Tracy said.

On homestead and farmstead relief, Tracy explained that the district expects to receive an increase in the state tax-relief allocation derived from gaming receipts. He said the district’s share of that allocation has risen in recent years and will be “just shy of $2,500,000” for the coming year. Because Kennett’s number of qualifying residential parcels is relatively stable—about 6,118 qualifying properties out of roughly 7,000 residential properties—he said the additional dollars will be distributed across the same base of properties and increase the per-property homestead/farmstead exclusion.

Tracy described the mechanics: Act 1 establishes the state program for real-estate tax relief derived from gaming receipts; the Chester County Board of Assessment identifies qualifying homestead and farmstead properties and sends rolls to the district. Once the district calculates millage, it “backs into” the assessment exclusion that produces the benefit shown on taxpayers’ bills.

Tracy reported the effective per-qualifying-property homestead/farmstead exclusion will increase from about $3.54 in the prior calculation to about $4.06 under the current projection, which will reduce the net impact of the district’s proposed 4% tax increase to the typical qualifying homeowner to an effective 3.3% increase, he said. He stressed that nonresidential properties do not receive the homestead/farmstead exclusion.

Tracy also discussed idiosyncrasies in distribution: when a qualifying property later declines the homestead (for example because the owner registers a primary residence elsewhere), the county removes the qualification and refunds the district the money for that parcel; when properties are under land-preservation programs such as Clean and Green, their assessed amounts differ and can trigger rollbacks if the use changes.

The committee confirmed that the proposed $107,695,765 general operating budget—along with capital reserve, food service and internal service budgets—will be placed on the board agenda for ratification at the regular meeting next week after no objections were raised.