Property taxes in the Brandywine School District are going up, as school board members open the door for a referendum in the future.
At their October meeting, Board of Education members heard sobering news from CFO Daniel McCoy - the district needs more money than it can raise with its current tax rate. Overall, the district needs about $4.2 million next year.
To get there, the district will be hiking property taxes by about seven percent for both residential and non-residential properties. State law allows districts like Brandywine to charge two different rates for residential and non-residential properties.
McCoy explained that the monthly increase for residential property owners would be relatively modest.
“The average residential parcel will see a tax increase of $12.50 per month,” McCoy said.
The district’s tax rate is actually a bundle of four tax rates, and not all of those rates are going up. Most notably, the portion of the tax rate that goes to pay off debt is dropping dramatically, thanks to a healthy reserve of funds earmarked for debt service. That reserve, which can only be used for debt service, comes from the district saving up money for large capital projects which have been turned down in recent years by state officials.
But, McCoy said, the state’s denial of those new projects means the district needs to increase the portion of its property taxes going towards minor capital improvements, like new roofs, repairs to HVAC systems, and similar needs. In recent years, the district has been able to tackle those expenses with other funding sources, but that is not the case anymore, McCoy said.
“That has resulted in more spending of our capital funds and facilities budget just to keep our aging buildings and infrastructure within those buildings operating,” McCoy told board members.
As a result, the new tax rate for those minor capital improvements, part of a state matching program, will rise to bring in an extra $272,000.
But the biggest increase comes in the portion of property tax that goes toward students with complex and intensive needs. The district’s population of students in need of those special education services is growing, McCoy said.
“The total increase of 93 students has resulted in the need for 10 additional classrooms,” he explained. “Each classroom requires a special ed teacher and a paraprofessional at a minimum.”
Making matters worse is that special education teachers are becoming more difficult to recruit, forcing the district to rely on outside contractors to fill the need, at a higher cost than hiring staff.
It isn’t a new trend, McCoy said, but as is the case with minor capital improvements, the district is no longer able to fill the gap out of other funds.
“For the past few years, we have been covering the deficit spending with reserves from our local funds. We have reached the point where this is no longer feasible,” McCoy told board members. “The reserves that we've relied upon have been exhausted.”
Meanwhile, the district’s finance committee wants to open the door for an operating referendum. Board member John Skrobot, who serves on the finance committee, stressed that the request was not being made lightly.
“The committee is very mindful of the financial strains that everybody's under,” he said.
District staff are expected to come to November’s Board of Education meeting with a presentation on the need for and feasibility of a referendum
Brandywine voters overwhelmingly approved an operating referendum in 2023.
