Reading School District proposes $428 million budget with no tax hike

May 25—The Reading School District is proposing a $428 million budget with no tax hike for the coming school year.

Wayne Gehris, chief financial officer for the district, presented the $428,030,305 draft budget Wednesday at the school board's monthly meeting.

An increase in funding from the state department of education and planned construction projects were considered in developing the proposal, he said. The draft assumes Reading will receive 100% of the increase Gov. Josh Shapiro proposed in his budget for both basic and special education.

"Reading School District is projected to receive $202 million in funding for basic education," Gehris said, "That is a total increase over last year of $18 million and 9.8%."

In addition, he said, the district is earmarked to receive an additional $20,574,000 in state funding for special education, an 18% increase over last year.

State funding is based on a formula that includes the median household income, Gehris said, noting the percent of district students living in acute poverty has dropped to 38% from 55.3% since the 2015-16 school year when the formula was adopted by the state.

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

"Our goal is to ensure that we have sustainable incomes for our families," Gehris said, "and one way to do that is to ensure that they're receiving quality education. So this is a positive thing."

Local revenues from earned income taxes, property taxes and real estate transfer taxes continue to be strong, he said.

"People are earning more," Gehris said. "We're seeing those increases year-over-year, and we continue to see a change in homeownership. So as individuals are obtaining some additional disposable income, you know, they are choosing to sell their homes and move up in properties, and then that allows for new families to move in."

In addition to state and local dollars, Gehris said, the current year budget includes a portion of the $168 million it received in federal Elementary and Secondary School Emergency Relief, or ESSER, funds.

The district set aside $30 million of that coronavirus aid package to build a science, technology, engineering and math, or STEM, academy at Ninth and Windsor streets.

The district also allocated $21 million in ESSER funds for heating, ventilation and air conditioning installation, upgrades and repairs, including the installation of air conditioning in the three middle schools, Northwest, Southern and Southwest.

Gehris said while the financial picture is rosy, the district must consider future needs as those funds dry up.

For that reason, he advocated the board consider a tax increase to continue to support building maintenance and improvements, and other operational needs.

"The best approach to tax increases is not to hit constituents with one large hit at one time," he said. "I think this needs to be a gradual amount."

The district, which has a rate of 17.93 mills, has the lowest tax rate in the Berks County and has held steady for the past six years.

Gehris recommended gradually raising the millage rate by a maximum of 6.8% over a period of several years.

At the currant rate, the owner of a home assessed at $100,000 is taxed at $1,793, less the $362.19 homestead exemption. By raising the millage to 18.65, a 5.9% increase, the same homeowner would pay $97.30 more a year: $1,914.92, less an exemption of $386.81.

However, Gehris stressed, the proposed budget is balanced, and does not call for any increases.

The school board is expected to vote on the proposal at its meeting June 28.

The draft budget can be viewed on the district's website.