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Budget committee recommends 2024-25 tax increase for Reading School District

The Reading School District may have to increase the property tax rate in order to balance the 2024-25  budget, according to administrators.

Many districts across Berks County and the rest of the state saw growth in residential, commercial and other developments that generate additional tax revenue, but that hasn’t happened in the city, said Wayne Gehris, chief financial officer for the district.

“Unfortunately, we’re just not seeing any commercial growth within the city limits,” Gehris said Wednesday at a school board committee of the whole meeting.

The district’s assessment base has been relatively stable without a significant amount of growth in residential or commercial activity that could increase tax revenue, Gehris explained in an interview Friday.

“When you have a flat or declining assessment base, if you need to raise additional resources, the only way to do that, really, is through tax increases to existing taxpayers, unless there’s a significant increase in the (state) funding to offset that,” he said.

That is not something the district can count on at this time.

Gehris said the budget committee is recommending a 4% millage increase, bringing the rate to 18.65 from 17.93 mills. That would mean a homeowner with a property assessed at $100,000 would pay a tax bill of $1,865.

The district’s current rate of 17.93 mills is the lowest school property tax rate in the county.

Though he cannot speak for the board, Gehris said he believes district leaders historically have been reluctant to increase taxes, which would increase the burden on city property owners.

“You know that the district only raised taxes, like, three times in 10 years,” Gehris said.

The rate was last raised 3% for 2015-16.

During the last decade, Gehris said, the city’s municipal government raised the rate four times, increasing real estate taxes by nearly 51% to 18.129 mills. During the same period, the school district increased its property taxes 8.9%, he said.

The district’s rate is significantly lower than other districts in the county, Gehris said, and may very well be one of the lowest in the state.

“So the burden that has been placed on the constituents of the city really was driven by the city’s increase in real estate taxes, not the school district’s,” he said.

The local economic capacity index is based on the ability of a district to tax its community, Gehris said. And the fact that there is additional capacity to do that, yet the district is not raising taxes, would be looked at negatively by state legislators, Gehris said.

State funding is based on a complicated formula that includes student enrollment and median household income.

The median household income has gone up from about $26,000 in school year 2015-16, to a projected $42,800 for the 2024-25 numbers, Gehris said.

Additionally, the number of individuals and families living in acute poverty has dropped significantly since 2015-16, based on the American Community Survey, he noted.

For the first time since 2015-16, the survey is showing a decrease in the number of individuals and families living in the poverty category.

The improved economic position of Reading residents is good for the community, he said, though it can reduce the amount of funding the district receives.

“While the state is willing to make a contribution to funding education for districts, they want to make sure that there’s an equitable contribution between the local taxing effort and the state support,” Gehris said. “That’s the feedback we’re getting from some legislators in Harrisburg.”

The district’s budget committee is in the process of developing the 2024-25 budget and plans to present preliminary numbers to the board in May.

“Our focus is to ensure that we’re honing in on the appropriate revenue numbers to ensure that we can stay conservative and accurate within those resources without putting any additional burden on excess burden on our taxpayers or on any fund balance we have,” Gehris said.

Source: Berkshire mont

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