SHARON SCHOOLS State's delay on budget causes a stir

Estimates show the district will run out of cash by mid-October.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
SHARON, Pa. -- The Sharon City School District might have to borrow money in October to pay its bills unless the state comes through with a new education budget soon.
James Wolf, district business manager, gave school directors an update Wednesday on the district's cash flow and said the picture is getting grim.
The district should have enough money to get through early October by spending money that it should be investing now to earn interest, he said.
Projections show Sharon will be $100,000 short by mid-October and $350,000 short by the end of October, Wolf said.
The lack of a state budget means the district didn't get its first of four $1.6 million subsidy payments Aug. 28, and it doesn't look too good for getting the second one at the end of October, he added.
The district has a couple of alternatives to keep the doors open, however, Wolf continued.
Borrowing options
It could borrow money from a bank through a Tax Revenue Anticipation Note, something it has done in the past to cover expenses before tax revenues start to come in, Wolf said, noting that Sharon hasn't borrowed money by that method in recent years.
The district also could look at borrowing against the $500,000 in its capital improvement account and the $400,000 in its capital reserve account, he said.
If the board decides to borrow through a bank, it needs to make that decision at its October meeting, Wolf said, adding that he has no estimate of how big a loan it should be.
The state has indicated it may be able to provide some assistance to districts that are faced with borrowing money until their subsidies come in.
The Department of Education could advance payments on debt service, Wolf said, explaining that the state will be reimbursing Sharon 45 percent of a $1 million debt service payment due in the spring.
The state has indicated it might be able to advance that money sooner, he added.
Real estate tax revenues
In a related matter, Wolf reported that real estate tax revenues are coming in ahead of last year.
One primary factor in that higher number is the 7.9-mill property tax increase enacted by the board this school year.
Wolf said collections for July, August and the first two weeks of September totaled $3,690,724, compared with $3,397,191 for July, August and all of September last year.
Per capita taxes are coming in more slowly than last year, however, he said, noting that $34,897 was collected in August, compared with $40,192 in August 2002.
Wolf said the total revenue from the $15 tax levied on school district residents may not be worth the trouble it takes to collect it.
He didn't have an estimate of collection costs but said the $91,000 is less than one mill of property tax, and the school board might want to consider converting it to a millage increase in the future.
gwin@vindy.com