Board member Jaime Johnson examines the budget presentation.
Ahead of its final budget vote at the end of the month, the Harrisburg school board heard a presentation Tuesday night from the group that created the district’s receivership exit report last year.
The outside financial advisory firm Public Financial Management (PFM) gave the presentation following the district’s approval in late May of a $227.7 million proposed budget. This budget, which proposes a 3% property tax hike, is now in its public review period.
Senior PFM officials projected that slightly higher property tax rate hikes than currently in the budget, 3.7% annually or 3.85% annually after this year if the district sticks with its current budget, could ensure the district will remain financially balanced in the coming years.
Casting projections as far as eight years out, PFM advised board members to be aware that salaries and benefits make up the largest chunk (50.9%) of its annual general fund expenditures. The next largest portion of expenditure is charter school tuition (16.2%).
Brianna Unegbu, a senior managing consultant at PFM, emphasized that the presentation was given “to help the board think through potential tax increases and to consider potential stressors on the budget.”
With state funding making up 67% of the district’s total revenue, Harrisburg will be sensitive to any increases or decreases in allocation from the state. Other potential stressors could include union contract negotiation or, with the district’s multi-million Capital Improvement Plan, the growing cost of construction.
Saraya Louissaint, a senior managing consultant, said factors that could improve the district’s projections long term included: real estate tax increases, increases of state funding or if the district is able to slow or contain growth in charter school enrollment. Real estate taxes make up 19.2% of the district’s general fund revenue.
Board members and administrators previously expected PFM’s recommendation on the tax hike to be higher than the 3% included in the proposed budget done by the district’s Chief Financial Officer Marcia Stokes.
“We are actually using it not in isolation, but as a comparative analysis with an analysis that our district had done,” explained board member Annie Hughes.
Stokes’ numbers are based upon numbers that she sees live on a regular basis and will be finalized in the coming weeks, while PFM’s numbers are based on more restrictive numbers in the district’s monitoring plan.
The final budget will be approved June 30.
On Tuesday night, the board also approved a one-year contract extension for Assistant Superintendent Dr. Marisol Craig and two contracts to increase cafeteria space at Camp Curtin.
Dr. Marisol Craig
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