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Letter to the Editor: Environmental Secretary John Quigley’s resignation a ‘serious loss for Pennsylvanians’

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Anybody want to help restore the Irem Temple building in Wilkes-Barre?

<p>WILKES-BARRE &#8212;Wilkes-Barre Area School Board has said for months it must cap borrowing for high school consolidation at $100 million, yet <a href="https://www.timesleader.com/news/545846/w-b-area-agenda-votes-on-cutting-4-programs-borrowing-up-to-150-million" target="_blank">voted May 23</a> to borrow &#8220;up to&#8221; $150 million during the last meeting. Should residents fear massive tax hikes?</p><p>Tax hikes, yes &#8212; possibly even a bit above the limit set annually by the state, Solicitor Raymond Wendolowski conceded. But not as much as the new borrowing amount might suggest.</p><p>&#8220;It clearly doesn&#8217;t mean the district will borrow $150 million,&#8221; Wendolowski said. &#8220;I don&#8217;t expect we&#8217;ll get close to that.&#8221; He predicted when the dust settles, the additional debt will be &#8220;plus or minus 10 percent&#8221; of $100 million.</p><p>Current plans call for consolidation of grades nine through 12 at Meyers and Coughlin High Schools into a new building at the Coughlin site, while expanding Kistler Elementary to house grades seven and eight from Meyers.</p><p>The new borrowing is intended to pay for all that and to repay a &#8220;bridge loan&#8221; to cover renovating the former Mackin Elementary building, which cost about $8 million according to district records. From the start, the plan was to roll that short-term borrowing into a long-term bond.</p><p>Wendolowski said as the district worked with contracted financial consultant CaseCon Capital, the notion of adding a cushion to the borrowing cap made sense.</p><p>&#8220;Originally, the resolution was for $140 million,&#8221; Wendolowski said. After additional discussion about the district&#8217;s effort to address long-term financial problems, it was bumped up another $10 million.</p><p>Along with providing a cushion if more unexpected construction or repair work crops up, the higher cap gives the district some flexibility in pursuing the &#8220;Pathway to the Future&#8221; plan adopted by the school board.</p><p>That plan is intended to prevent potential bankruptcy. Internal and external reviews of district finances projected annual red ink as deep as $70 million in five years if nothing changes.</p><p>The &#8220;Pathway&#8221; requires cutting up to $11 million in spending in five years while building a reserve for future capital projects. The board has already voted to suspend four programs this fall &#8212; arts, industrial art, library services and family and consumer sciences &#8212; a move that has evoked rigorous public criticism.</p><p>Wendolowski said one possibility would be to use some of the new borrowing to cover old capital spending, essentially replenishing money that had been spent from the general fund for repairs and maintenance in recent years.</p><p>&#8220;The board has spent significant money on capital improvements and it all came out of the general fund,&#8221; Wendolowski said. &#8220;The district probably should have borrowed the money back then.&#8221;</p><p>The district can legally borrow considerably more than $150 million. The state limits school district debt to 225 percent of the total budget. Because Wilkes-Barre Area has a relatively low debt of about $32 million means the board could borrow something near $190 million.</p><p>The $100 million cap proposed previously stems from annual limits on tax hikes imposed through the state law known as Act 1 of 2006, which promised to use money from legalized gambling for statewide property tax relief.</p><p>The law created the Act I index, a percentage limit set annually for each school district. Districts can exceed the cap one of two ways: by seeking state exceptions for any of four allowed reasons, or through a voter referendum in the primary election.</p><p>The district and its advisers calculated $100 million as the maximum new debt it could pay off while staying under any future Act I index caps. That, in turn, restricted options as the school board contemplated updating the current three high school system.</p><p>Prior to that self-imposed limit, proposals had estimates as high as $232 million.</p><p>Wendolowski noted the district has never sought an exception since the Act I index was implemented, even though it likely qualified for two of them: To pay for rapid increases in special education costs or pension fund requirements.</p><p>He added those options still remain while crafting future budgets, theoretically allowing the district to exceed the limit without a referendum.</p><p>A 2014 Times Leader review of state data showed that, among Luzerne County school districts, Wilkes-Barre Area had the second lowest overall tax increase from 2008-09 through 2013-14, with property taxes climbing a total of 4.7 percent.</p><p>Taxes have been increased since 2013-14, and the total increase from 2008-09 to 2015-16 is 9.9 percent.</p><style>
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<div class="neCaption">FOR WEB</div></div><div class="metaInfo"><photo0>https://www.timesleader.com/wp-content/uploads/2016/06/web1_WB-Area-taxes-6-10-16.jpg</photo0><caption0>FOR WEB</caption0><photoCredit0></photoCredit0></div></div>
<div class="metaInfo"><bylineMeta><p>By Mark Guydish</p><p>mguydish@www.timesleader.com</p></bylineMeta></div><div class="metaInfo"><factboxMeta><p>The district can legally borrow considerably more than $150 million. The state limits school district debt to 225 percent of the total budget. Because Wilkes-Barre Area has a relatively low debt of about $32 million means the board could borrow something near $190 million.</p></factboxMeta></div><div class="metaInfo"><shirttailMeta><p>Reach Mark Guydish at 570-991-6112 or on Twitter @TLMarkGuydish</p></shirttailMeta></div>

Does ‘up to $150 million’ in debt mean tax spikes in Wilkes-Barre Area?