Budget Information

Millage is the tax rate used to calculate local property taxes. It is based on a property's assessed value and is expressed in mills (1 mill = $1 of tax per $1,000 of assessed value).

10-Year Millage Rate Chart

This chart provides a 10-year overview of the District’s millage rate and the annual percentage change. It is intended to help the public understand how the local tax rate has changed over time and provide context for long-term budget planning.

Local taxes and other local funds make up the largest share of the district’s funding.  Local sources make up 63% of the budget, followed by state sources at 36%, and federal sources at 1%.

Over the last decade, school districts have faced significant increases in mandatory expenses, such as special education, charter school tuition, and retirement savings for school district employees. Unfortunately, state funding has not kept up with these rising costs, leading to budget shortfalls. As a result, school districts have had to rely more heavily on local property taxes and use their savings (also known as fund balances) to meet their financial needs.

To calculate your property tax bill, follow these steps:

1. Find your property's assessed value: This information can usually be found through the York County Assessment Office.
    
2. Locate your millage rate: The millage rate (or mills) is the tax rate charged for every 1/1000th of your property's assessed value. For example, 25.4071 mills is equivalent to a millage rate of .0254071. You can find this information on your property tax assessment notice or on the District’s website.
    
3. Multiply the assessed value by the millage rate: This will give you your estimated property tax.

Example: If your property's assessed value is $100,000 and the millage rate is .0254071  mills, your estimated property tax would be $2,540.71.

The Business Office has a tax calculator designed to give a taxpayer an estimate of their potential property taxes. This tax calculator should only be used as a resource.

Tax Calculator

Your assessment value can be found through the York County Assessment Office. 

York County Assessment Office

Act 1 is a state law that limits how much schools can increase property taxes each year. The maximum allowable increase is determined by the Act 1 Index.

It's important to note that the Act 1 Index is simply a number representing the maximum possible increase. It does NOT indicate the amount that the school district administration recommends. The School Board ultimately decides how much to increase taxes within the limits set by Act 1.

School districts must plan their budgets based on the amount of money available (a resource-driven budget). This means available revenues determine and define what programs school districts can offer or continue.

The Homestead/Farmstead exclusion is a property tax reduction provided through the Taxpayer Relief Act of 2006. Under a homestead or farmstead property tax exclusion, the assessed value of each homestead or farmstead is reduced by the same amount before the property tax is computed.

To be eligible for a property tax reduction, you must have applied for and been approved by the York County Assessment Office for the homestead or farmstead exclusion by March 1st. If you are a new resident or have not previously applied for the Homestead/Farmstead Exclusion, please contact the York County Department of Assessment at 717-771-9232.

The school district's budget cycle follows the same timeline as the state's fiscal year, which runs from July 1 to June 30. As required by law, this means that the school district must pass a new budget by June 30 each year.

One of the challenges of this process is that the school district must develop and pass its budget before knowing its final allocation of state funding. This requires significant planning and estimation, as the state budget deadline also falls in June.

Due to this overlapping timeline, school districts often manage aspects of three different budgets simultaneously. For example, in the fall, a school district is:

• Planning for the upcoming budget year: Involves planning, preparation, and adoption
• Implementing the current budget year: Involves implementation
• Evaluating the previous budget year: Involves evaluation

This overlapping process ensures that the school district can effectively plan for the future while managing the present and learning from the past.

Preliminary Budget is the first draft of the school district’s budget. It outlines expected revenues and expenses for the upcoming fiscal year and helps start the planning process. It is created during October, November, and December and is presented in January. 

Proposed Final Budget is the nearly finished version of the budget. The School Board adopts it tentatively (in April) to allow time for public review and feedback. Changes can still be made before it becomes final.

Final Budget is the official, approved budget for the next school year. It must be adopted by June 30. It includes the finalized plans for spending and revenue, including any tax changes.

One of the major challenges faced by school districts when preparing their budgets is that the deadline for passing the budget often coincides with the state budget deadline. This means that the district must develop and finalize its budget before knowing its final allocation of state funding.

In addition to this challenge, school districts must consider many other factors that can change or be uncertain. These factors, known as variables, include:

• Enrollment changes: Increases or decreases in student enrollment can affect the number of teachers and staff needed, as well as classroom space.
• Staffing needs: Changes in staffing requirements, such as new programs or increased class sizes, can impact the budget.
• Local real estate market: The value of local property can influence property tax revenue.
• Healthcare costs: Increases in healthcare costs can affect the district's employee benefits budget.
• Special education costs: Changes in special education enrollment or services can impact the budget.
• Facility planning: Maintenance, repairs, or renovations of school buildings.
• Energy costs: Fluctuations in energy prices can affect the district's utility bills.
• Emergency needs: Unexpected events, such as natural disasters, can require additional funding.

To make informed decisions about these variables, the school district relies on data and guidance from various sources, including:

• Financial advisors: Provide expertise on financial matters and budgeting.
• Insurance brokers: Help the district manage its insurance costs.
• Health insurance advisors: Offer guidance on employee health insurance benefits.
• Energy consultants: Provide advice on energy efficiency and cost-saving measures.
• Purchasing consortiums: Negotiate group discounts on goods and services.
• Internal staff: Contribute their knowledge and expertise to the budgeting process.

By carefully considering these variables and utilizing the available resources, the school district can develop a budget that best meets the needs of its students and community.

The major budget categories include:

100 – Salaries

200- Benefits

300 – Professional & Technical Services (Solicitor, Auditing Services, Services provided by the LIU, Technology Services)

400 – Property Services (Repairs & maintenance, disposal services, lawn care, rentals & leases)

500 – Purchased Services (Transportation, insurance services, tuition to other educational agencies)

600 -  Supplies (Classroom supplies, software, licenses, books)

700 – Equipment (New and replacement equipment)

800 – Other Objects (Dues and fees, interest on bond, financed purchase agreements, leases and other right to use arrangements)

900 – Other Uses of Funds (Redemption of principal on debt service, financed purchase agreements, leases and other right to use arrangements, transfer to other funds)

Salaries and benefits are the single largest budget classification, making up 65%. Other fixed-cost expenditures, such as debt service, comprise 6% of the budget. Debt service refers to the district’s outstanding obligations on bonds to finance school construction projects. 

State mandates have a significant impact on the district’s budget. The district has seen a significant increase in state-mandated costs such as pension contributions, special education, and charter school tuition, while state support remains virtually unchanged.  Shortfalls in state funding have forced local school districts to make up the difference using local tax revenues. 

A fund balance is like a school district’s savings account, but it’s more than just cash in the bank. It represents the difference between what the district owns (assets) and what it owes (liabilities).

Each year, the district reports its fund balance as of June 30, giving a snapshot of its financial health at that moment. Maintaining a strong fund balance is important because it helps the district cover unexpected costs, plan for future expenses, and keep tax rates stable.

According to financial experts, having a healthy fund balance protects against budget shortfalls and ensures the district can continue providing quality education, even if unexpected expenses arise.

Spring Grove Area School District assigns a portion of the fund balance to state-mandated costs such as pension contributions, special education, and charter school tuition costs that are not under the school district’s control.  Other uses are for healthcare costs that routinely exceed inflation, as well as future infrastructure needs and upgrades, especially when there is no longer state funding for even the most basic renovations. Schools have large buildings that require regular planned and unexpected maintenance and improvements to maintain the life of the building, to meet safety requirements for students and staff, and to ensure quality learning environments.

This portion of the fund balance is commonly used to meet cash flow needs or to finance monthly operating expenditures. While the unassigned fund balance is technically spendable, a significant portion on June 30 is in accounts receivable from federal, state, and local sources that are not available to spend until received in the following months.

Generally, school districts have little income during June, July, and August and a lot of expenditures associated with the close of one year and the start of another. Many rely on fund balances to cover current obligations or unexpected increases in expenditures due to increased special education or charter school enrollment or unexpected decreases in revenue. 

A school district’s unassigned fund balance is the equivalent of the state’s Rainy Day Fund. A significant difference, however, is that it is much easier for the state to reduce funding to schools or other agencies, while schools and other agencies are tasked with reducing programs and staff due to lost funding.

Spring Grove Area School District operates a capital reserve fund—a fund outside the General Fund for infrastructure needs. Once funds are moved into the capital reserve fund, they cannot be moved out.

The district has a clear list of projects and capital formation items identified that include more than five years of projects, needs, and estimated costs. The school board aligns priorities each year as to what capital projects move forward. The amount of money in this fund is rarely enough to cover the needs that can be identified on these lists.