Saucon Valley School District taxpayers who viewed the board’s Tuesday meeting agenda and saw that a vote on an approximately $46 million proposed budget with a 0 mill tax increase was on it may be in for a surprise, if they didn’t attend the meeting or watch it online.
At the meeting, the board approved 6-3 the 2018-2019 budget proposal with the inclusion of a .4 mill tax increase, which according to district finance manager David Bonenberger would mean a $40 annual increase on a home assessed at $100,000.
And that’s not the whole story.
The board also discussed possibly eliminating the $10 per capita tax all district residents must pay annually.
Board member Shamim Pakzad, who proposed both eliminating the per capita tax and increasing the tax rate by .4 mills, said the per capita tax has been referred to as a “nuisance tax” because it has lost its value over the decades as a result of increased tax collection costs. The tax currently costs about $12,000 to collect, which is 10 percent of the revenue it generates.
The revenue from it currently accounts for just .2 percent of the district’s budget, he said.
“To make sure that we are not losing any of our revenue I would like to propose…an additional real estate tax,” Pakzad said. “This will pay for that tax that we are eliminating, maybe, and it will also give us a little cushion in case we have some expenditures this year for the math program or other projects that I know the staff are working on.”
Pakzad said the proposed math program’s cost is yet to be determined, and will depend upon how many grade levels will be included, “but this will make sure that we’re not going to have to go through the rest of the budget to pay for that. So this (.4 mill increase) will be the per capita tax plus a little bit.”
In order to cover the loss of the per capita tax alone, the tax rate would need to be increased by .21 mills, Pakzad said, in response to a question from board member Bryan Eichfeld. That millage rate increase translates to approximately $119,000 in budget dollars.
Board member Sandra Miller said the exact amount of the increase could be fine tuned as the cost projection for the new math curriculum–currently forecast at about $120,000–becomes clearer in the coming month.
“We might be able to come down to the exact amount that we would need to make sure that we can cover it,” she said. “We would never want to spend more than is needed for a program.”
Although the math program would be a one-time expenditure, the district’s “budget forecasts are not looking good,” Pakzad said.
“Every time we raise taxes it never goes the other way,” responded Eichfeld, who appeared skeptical of the forecasts as characterized by Pakzad.
“I would like to be revenue-neutral,” he said. “I would like to have one more year of no tax increase.”
“We are doing the curriculum review really on the cheap,” Pakzad said. The money being spent “goes directly to the kids,” he said, which is why it is the “cleanest” kind of increase taxpayers can be asked to finance.
“I could swing towards eliminating the per capita tax but I’m not comfortable with the additional .2 percent that Bryan pointed out–and it doesn’t mean it can’t be added later–but I don’t feel like we have a definitive number, and I’m not comfortable approving a proposed budget and throwing in some additional money when we’re not really sure what that additional money is,” board member Susan Baxter said. “So I could either approve it with a .21 percent increase or I won’t be voting for it.”
Baxter did vote against the updated proposed budget that included the .4 mill tax increase (for a total millage rate of 53.43 mills), along with Eichfeld and board president Michael Karabin.
Following the vote, district employee Vivian Demko–speaking as a Hellertown resident–asked what the average household tax increase will be “compared to the per capita tax.”
After Bonenberger said he would need to provide her that number later, Pakzad said that “some households will see a few dollars more (that) they pay; some households will see that reduced.”
District resident Robert Phillips addressed the board and criticized those members who voted in favor of the budget proposal for making a last minute, unadvertised change to it. He also singled out Pakzad for what he labeled a betrayal of a campaign promise.
“Mr. Pakzad, you ran on an agenda that ‘I’m not going to increase taxes on fixed income seniors.’ You’ve just done that. So, let it be on the record that your campaign promise has just been proven to be false,” he said.
“You’re changing what you published online,” he added. “You’re sneaking in under the eleventh hour. When you’re saying you want to show respect and be collaborative and work with people–a motion like this doesn’t suggest that’s your true intention at all.”
Karabin then emphasized that the proposed budget is now available for public review, and can still be revised before its final adoption by May 31.
In March 2017, while participating in a public school board candidates forum sponsored by Saucon Source in Hellertown, Pakzad said:
I said I won’t raise taxes. I won’t raise certain taxes on certain people. Let me explain. I have a neighbor…who called me a couple weeks ago and said ‘I’ll have to sell my house and go to Center Valley or buy a house in Bethlehem. I can’t afford the taxes here. A veteran. A retired member of the community and someone who’s lived here his entire life. If we can’t consider that case–the case of this gentleman–and many, many other people who are like him in this community, we really don’t know the community that we are serving. And I do believe that this is a real issue. We can’t not have that problem and pretend others have a solution for it… You know, it kind of feels like the board member who said a few days ago, ‘just deal with it’–in a different context–this sounds to me like that. If you can’t afford the taxes, just deal with it. That’s not the right approach. So let me tell you what I believe in terms of taxes. First of all I don’t believe the numbers that we see. I know there are these five year projections and so forth. I remember that last year we went to one of the board meetings and the administration brought the budget and the board asked them to cut half a million from that budget, and a few days later they came back with a budget that was half a million dollars short. I think we need to look at all those numbers and see where the budget projection is; what is the correct value there. The second point I want to make is that, you know, everything we say here about the taxes–it may be a moot point in a few months. There is a bill in Harrisburg that is being considered, HB 76, and that could restructure our entire tax system–funding for the public education. So, it could shift the burden from the real estate tax to the income tax and to the sales tax. And I’m not saying I’m in favor of that or opposed to that. My point is that we can say ‘we want to raise taxes,’ we can say ‘we don’t want to raise taxes,’ but in a few months we may not have the authority to do either of them. So we should consider that when we talk about this issue with the community. We should be honest about it. The third point I want to make is that we haven’t really considered the options that we have for raising revenue for supporting our programs. (Then-candidate, now board member) Ms. (Tracy) Magnotta here mentioned some of them. And I think these are important opportunities that we have to explore. I don’t think we’ve done that. Partnerships with corporations, with industries, with the foundations… I have done that in my job and (unintelligble due to audio glitch). I think we should go to that as the next step. But at the end of the day if we have to generate more revenues and if it is still upon us to do that, I’m not going to raise taxes for my neighbor who is a seventy-some-year-old retiree, veteran, and this would drive him out of this district. We have to find other ways to make sure that the tax burden on him and on elderly, retired people who are on a fixed income will not increase. And I’ll pledge that and I’ll work with anyone who is willing to work on that. I think that’s something we should consider and that’s something we should pledge and that’s something that we should do.
The above statement begins at approximately 1:53:07 in the video.
In response to a request for follow-up comment about his 2017 statement vs. his actions Tuesday, Pakzad released the following statement:
I had said I don’t want to increase the tax burden on senior citizens with tight finances. We are basically swapping two small taxes which would result in almost a wash. The per capita tax has been a nuisance tax, generating a very small percentage of district’s revenue (close to 0.2 percent) which many of our taxpayers have complained about to me. One of my most conservative and anti-tax colleagues, (board member) Ms. (Linda) Leewright, has been trying to get rid of it for a long time. I partnered in this cause with her to alleviate the taxpayers from this burden; and we decided, in order to not be accused by anyone for the financial problems the district has and will continue to have if spending is not brought under control, we will pay for this tax cut and a few dollars more. We will play the responsible party’s role in this change and will continue asking the board, the administration and the teachers union to play their parts to make sure spending is under control and the taxpayers money is not wasted. We have a very large budget compared with our district’s size and should be able to live within our means.