Greensburg Salem looks to draw on fund balance to cover 2021-22 revenue gap

A $1 million operating surplus forecast for Greensburg Salem at the end of the current fiscal year is expected to help the school district avoid a tax increase for 2021-22.

But it won’t be enough to avoid dipping into the fund balance to cover next year’s expenses, according to a proposed budget the school board will consider for approval on Tuesday.

The tentative $47 million spending plan would be supported by more than $46.2 million in expected revenues, with a remaining $715,000 gap to be bridged by drawing from the district fund balance. That would reduce the fund balance from $5.25 million forecast for this year to $4.5 million proposed for 2021-22.

“Next year, we would be in a lot worse shape if we did not have the surplus from this year,” said district business manager J.R. Dzurica. “Our deficit would be a lot more.”

In April, Dzurica forecast a potential surplus of about $1 million for 2020-21 since local tax collections have not been subject to the severe decline that had been predicted when this year’s budget was approved at the height of the covid-19 pandemic.

“Fortunately, our real estate taxes and revenue from earned income taxes really came in where they needed to come in,” Dzurica said. “We really didn’t see a big hit.”

Low interest rates, though not favorable for district savings, combined with federal pandemic stimulus payments to fuel strong collections from district real estate transfer taxes, Dzurica said. “A lot of people are buying properties,” he said.

As a result, he’s predicting local tax revenues of more than $25 million in 2021-22, up by $766,000 — or 3.14% — from what was budgeted for this year.

“It’s mainly restoring the collection rates back to what they normally do,” he said.

At the same time, state revenues are expected to fall by close to $300,000 while federal funding should remain nearly flat — not counting federal pandemic recovery funds, which come with spending restrictions.

The three largest expenditure categories are expected to increase by about $1 million combined next year: a $449,000 rise for salaries and wages; $372,000 more for employee benefits; and a $226,000 increase for other purchased services, including tuition for students placed outside of district facilities.

Dzurica said the district expects next year to spend about $2.2 million to cover tuition costs for an average of 150 students who are enrolled in independent cyber charter schools. That reflects an increase of $401,000 from the previous year.

“That’s $2.2 million going out the door, and we’re seeing no benefits here in our district,” he said.

Greensburg Salem is proposing to restore some positions, including an elementary band instructor and a grant writer, that were phased out under this year’s pandemic-driven budget.

Three librarian positions also were cut, but Superintendent Gary Peiffer has said they could not be added back without a tax increase. Each mill of real estate tax generates about $232,000.