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Area schools may be seeing some short-term savings thanks to closed schools and no students to transport, but a state organization estimates the economic downturn caused by the COVID-19 pandemic could cost Luzerne County district up to $22.4 million in lost local tax revenue in the 2020-21 school year.
				Using data from the income districts lost during 2007&rsquo;s Great Recession, the Pennsylvania Association of School Business Officials (PASBO) projected losses for each of the state&rsquo;s 500 districts in two scenarios: a quick recovery from the current situation and a slow recovery.
				&ldquo;PASBO&rsquo;s estimate of the loss of local revenue is based on a study of the effect of school taxes during the Great Recession and a projection that the COVID-19 economy will create deeper and much more immediate cuts,&rdquo; a post on the PASBO website said.
				The organization&rsquo;s director of research, Timothy J. Shrom developed the project with Andrew Armagost, PASBO research and advocacy manager.
				&ldquo;In an economic downturn we know that unemployment goes up, thereby reducing our local income tax revenue, and we know that the real estate market will be affected, resulting in a reduction of our real estate transfer tax,&rdquo; Shrom said in the posting. &ldquo;We also know that our taxpayers will need more time to pay, thus reducing property tax revenues, and with the significant cuts in the rates, interest earnings will take a hit as well.&rdquo;
				Statewide, PASBO estimates the slowdown could cost $850 million in local revenue with a quick recovery, and more than $1 billion if the recovery lags.
				Locally, the estimated losses in a quick recovery range from $465,720 at Northwest Area to $4.5 million at Hazleton Area. The high estimates range from $581,051 to $5.4 million for the same two districts.
				The impact is different if you look at it as a percentage cut from this year&rsquo;s local revenue. Hazleton Area &mdash; the county&rsquo;s biggest district &mdash; still faces the biggest loss, ranging between 7.2 percent to 8.7 percent. But Northwest Area, the county&rsquo;s smallest district, would face losses of 6.4 percent to 8 percent, the third highest percentage loss in the county.
				PASBO released the study as the state budget itself faces strain from the economic slowdown, and as the state General Assembly discusses freezing school district property taxes at this year&rsquo;s rate.
				&ldquo;We believe that school districts will do everything they can to recognize the financial impact that COVID-19 has had on taxpayers, and property tax increases for next year will be considered only in those school districts with no other fiscally viable options,&rdquo; Assistant Executive Director Hannah Barrick said in the post. &ldquo;School districts simply can&rsquo;t absorb simultaneous revenue declines at the local and state levels while also facing mandated cost increases.&rdquo;

Report: Pandemic could cost local school districts up to $22 million