Proposed Manchester School Budget Shows Tax Increase

The tax levy presented in the 2011-12 Manchester Schools tentative budget is set to increase 2.7 percent over the 2010-11 plan as district administrators have applied to exceed the state's 2 percent cap law.

This would mean a property tax increase of $27.73 per every $100,000 of assessed property value should the budget be adopted as is, said a district official.

"Our tentative budget reflects an increase of 2.7 cents per $100 of assessed value," said Craig Lorentzen, business administrator and Manchester Board of Education secretary. "The cost to the average household is $53.82 for the year or just under $4.50 per month in school tax," per each $100 of assessed value.

When applied to $100,000 of assessed home value, taxes would increase $27.73. According to Lorentzen, the average assessed home value in Manchester is $194,100.  

The 2011-12 school budget will be presented in detail during a March 24 public hearing at the Manchester Township High School auditorium at 7 p.m. School officials have encouraged residents to attend and make their opinions known.

"A tax calculator will be provided on the district website after our public hearing," Lorentzen said. "A taxpayer can use their home's assessment value and determine the change in school taxes."

Lorentzen said that the township went through a property reassessment two years ago.

"Since that time, there has been limited growth in the town and several appeals of the new property tax assessments have been filed. This has caused the tax base," or ratables, "in Manchester to decrease just under $6 million from last year," he said.

"When you have a decrease in ratables, you have less of a tax base to allocate the tax levy over," Lorentzen said. "This inherently increases the tax rate."

The waiver to exceed the state's 2 percent cap is necessary because of increases in health-care costs, said Lorentzen.

"This year we are facing a 20 to 30 percent increase in health-care costs in a budget that is capped at 2 percent," he said. "As you can see, this is a major issue."

If a waiver is granted, the district will be allowed to present a tax levy to voters that exceeds the 2 percent cap.

"This waiver is offered to combat the increasing cost of health-care beyond the tax levy cap," he said.

Lorentzen said that health-care costs for years have exceeded both the old tax cap, which was 4 percent, and now the new 2 percent cap that was approved by the state Legislature last year.

The tentative 2011-12 budget, which was approved by the board last week, calls for a local tax levy of $38,695,101. The general fund revenue as introduced is $46,364,752.

The debt service tax levy for 2011-12 is decreasing by $131,361, bringing the total tax levy increase from 2010-11 to 2.7 percent.

The 2010-11 local tax levy was introduced by the school board at $37,634,507, according to a district budget document. But that budget was defeated by voters and further cuts were made; the the general fund tax levy for the current school year ended up as $37,489,885, Lorentzen said.

The district is always looking for ways to reduce the costs of the proposed budget and Lorentzen said that administrators are "currently examining all our options."

"This year we have started collecting contributions from our employees towards our health benefits plans, in our most recent contract renewals we negotiated changes to the plans that reduced cost to the district," he said. "We are currently working on another change that could provide a significant savings to the district on health-care costs in the 2011-12 budget."

Though Manchester received an increase of $453,145 in state aid for 2011-12, bringing the district's total aid to $4,795,164, Superintendent David Trethaway recently said that the district still has to climb out of a budget hole.

"We knew this was going to be a difficult year because last year we had a reduction of $2.4 million," in state aid, which he said "resulted in about $1.8 million in cuts" to the district's budget. "It's kind of like going to the grocery store and they raised the prices 30 percent and then give you a 20 percent discount."

Because of the reduction, freshman sports, some extra-curricular activities and 23 staff positions were among the cuts made last year.

But Lorentzen said that saving on health-care costs and the cap waiver "would allow us to maintain our educational and extracurricular programs and staff as long as our budget passes." 

If voters do not pass the budget during the April 27 school election, it will be reviewed by the township council, which will recommend spending cuts.

Lorentzen said he believes last year's budget defeat was more a sign of residents expressing their frustration with difficult economic times than being unhappy with the plan.

"The economy was not rebounding quickly enough. We had unemployment and foreclosures at its highest rate in years," he said. "Since the school budget is the only budget that is voted on at the state or local level, it's the only chance the taxpayers have to voice their opinion."

Lorentzen said that school officials are "very cognizant of what impact the budget we present will have on the taxpayers" as they prepare the spending plan.

"As a board of education we are charged with the responsibility of educating over 3,200 students," he said. "We want to be able to provide them with the best opportunities we can while realizing that there is a limit to what we can do. "

This means finding a balance between providing for students and not placing a large tax burden on homeowners, Lorentzen said.

"As we prepare the budget, everything that is going on in the community is considered," he said. "We try to present a budget that meets the educational needs of the district as well as consider the effect it will have on the residents of Manchester."