District Looking at Tax Increase, Layoffs, and “Bankruptcy”

District Looking at Tax Increase, Layoffs, and “Bankruptcy”

The board and administration of the Highlands School District in northeastern Allegheny County held a meeting last night on its budget proposal for 2018-19 (the fiscal year starts July 1st) and the picture is not rosy.

Property taxes could increase 3%–This year’s millage rate is 23.8 and taxes have not increased since 2013-14 (there were tax increases in 2010-11 and 2011-12).  The District’s Act 1 index (the cap on how high taxes can increase year over year unless there is an exception or voter approval in a referendum) is 3.5%, so millage could go as high as 24.6 mills.

There could be teacher layoffs–Currently the District has seven schools (the District’s website lists seven different facilities at different addresses that don’t match up exactly with the school listing at the Department of Education).  There would be grade realignment and reorganization at the buildings if the plan would go through and either school consolidation, program changes, or financial reasons could lead to furloughs under the school code.

“Bankruptcy” could be on the horizon–The District borrowed $11.5 million to cover pension obligations and to restructure debt, and doing nothing, according to the president of the school board, could lead to bankruptcy.  As our 2009 report noted, the only local subdivisions that can declare actual bankruptcy in Pennsylvania are municipalities; school districts have their own version of financial recovery under Act 141.  Highlands is not yet in the status of financial watch, which is preliminary to full financial recovery.