Look into the history of the PSERS system. The problem wasn't created by the teachers, it was created by Harrisburg. When the program was started it was funded equally by teachers, school districts, and the state. When the stock market was booming and the pension fund appeared well funded the state eliminated their copayment and reduced the school districts copay. Now that the stock market crashed and they have to resume paying their fair share everyone is blaming the teachers. The teachers are the only ones who continued paying their fair share through good times and bad,

Sentner knows this LMTnative. He is a politician who likes to play the same kind of games. Also keep in mind that it was a GOP stacked PA state government who made the terrible decisions in 2001 which has led to this debacle. However, it's really fashionable to blame teachers.

I really don't care who came up with psers, its going to be a crushing blow to the tax payers and surely doesn't do a thing for educating the children. There are so many problems facing this school district and some are not self inflicted LMT' s rediculous planning , NIZ it's going to impact EPSD and nobody knows to what extent, the over crowding of schools ( not a fault of the teachers and needing more schools, Unfunded mandates like Cyber schools, Busing, and I am sure a host of other things that I am not aware of. Poor parenting again not a fault of EPSD, And the pension bomb, I don't care who came up with it, it's rediculous and going to bankrupt some school districts. It's the elephant in the room that no one wants to talk about and it feeds on itself , this is not a cut on teachers if we need them we should hire them all I am saying is you can not keep raising taxes and expect the citizens not to be enraged. Maybe we need to find another way to fund our schools instead of on property owner's backs. So thruth seeker I am not blaming the teachers I am blaming whoever came up with it. My question is if everyone knows what a disaster this is, why is no one doing anything about it ??? If any of us ran our business like this we would be bankrupt in a couple years. some of my best memories in life involve past teachers, they shape and mold the children and leaders of the future.

LMT and truth seeker, I wasn't blaming the teachers one bit, And I take calling me a politician a personal insult, I am as far from a politician as you can get. I am 100% for being fiscally responsible. And not in bed nor have I ever been with anyone, every decision I make is 110% what I think is best for the community. Might not be best for a particular group or person but I have the whole community in mind when I make a decision.

You got that right....a little increase here, a little increase there, it all adds up, and I'm tired of constantly having to bend over for this district, it's time they start thinking of the community and thinking more fiscally responsible

Thank you "taxed-enough" for the further enlightenment that these articles do not give us.....

What would be your suggestion for a more valid voting option? It sounds as if you would prefer to explore other options including the outsourcing of some services? Help us make this better!

Thank you for asking. How about an option like this..... "No more tax increases until the school board provides a DETAILED budget online including all details for expenditures?" ......This detailed budget already exists, but they won't put it online (cost for overtime, cost for extra work for extra pay, cost for cell phones paid by the school district, cost for optional after-school-clubs, cost optional summer school, cost for things like ski club, cost for flying personnel overseas and to China, cost for adult education for people over the age of 18 who are not students for things like cooking classes, cost for janitorial work, cost for maintenance vehicles, cost for after-school activity buses, etc. If we knew exactly where the money was spent, it would address many concerns. However, there is no detailed budget online. Our district has placed the report cards of every student online including details like every missed and completed homework assignment for parents to access, but we can not put the detailed annual budget online to show exactly where we spend $125,000,000.00.

http://lowermacungie.patch.com/articles/emmaus-gop-activists-sue-democratic-candidate
Here is a very good reason why people would prefer to NOT use their real names, there are some psycho people out there

If your first full name is Katherine, then please identify yourself as one of the assistant principals at Emmaus High School. It is called full disclosure. All teachers and administrators are online at this web site.
http://www.openpagov.org/k12_payroll.asp

Great comment. These people like to make comments but hide behind screen names, how cowardly.

How does this fit with the part of the gambling law that prohibits school districts from raising taxes when certain portions of their reserves and fund balances are more than 8%?

BTW, I'm in favor of a decent reserve of 5%, but also caution that trying to get rid of a reserve that is too high needs to be done carefully. Since it is one time money, I wouldn't spend more than the amount I would plan to raise taxes the next year. In other words, expect the next years tax increase to be doubled if you spend that much of the reserve. Got to meter it out carefully. If you don't, what happened in the 1990 budget could happen again.

Good points Ted. From what I understand the law prohibiting tax increases when reserves are more than 8% of expenditures only applies to the budgeting phase. That means if the beginning fund balance is underestimated, the revenues are under estimated, and the expenditures are overestimated the ending reserve funds will be under the 8% limit. For example based on the information released by the EPSD it appears that the 2010-2011 budgeted ending committed fund balance was budgeted as $3,412 but the actual ending uncommitted fund balance was $11,809,946.

I also agree with your statement that the excess funds need to be spent down carefully. One of the concerns raised by a school board director opposed to the tax cut was if they cut taxes this year they may not be able to raise your taxes enough next year. This is because a large tax increase would need to go on a referendum. A possible solution might be to disperse the excess funds as a tax credit or refund depending on how much it would cost.

I believe the 2nd part of Ted's point is correct. It would feel great to give a tax return but you must consider the future impact. I encourage folks to read the East Penn Press article on the board meeting as it gives a fairly good explanation.

truth seeker – I wouldn't recommend people read the East Penn Press article. It appears that it contains mistakes. For example Mr. Stoltz never said to take $1.45 million out of the general fund to prevent the tax increase and the PlanCon money was only $1.25 million, not $12 million as the article states. The articles on Patch do a much better job of explaining the information also WFMZ had a very good article. http://www.wfmz.com/news/news-regional-lehighvalley/East-Penn-battles-over-proposed-budget/-/132502/13393104/-/roh7yh/-/

@giovanni - good point about rebating excess fund balance. the school board wouldn't need to cut taxes to do that which could put them behind the eight-ball due to the index limitation, which might not allow them to catch back up the next year. In fact, the board could raise taxes by the index amount to keep revenue matched with spending and simultaneously rebate the excess fund balance, if it was deemed to be too high. Two separate transactions, but put it all on he same bill, so it doesn't cost anything to execute, like mailing a rebate check would.

Indeed, the Lehigh COunty executive made a very similar proposal in his initial budget proposal during the summer. He called it an expiring tax credit. See:http://www.lehighvalleylive.com/lehigh-county/index.ssf/2012/08/lehigh_county_no_tax_increase.html

Kevin I think your point is well taken. Unfortunately our school district is probably going to see increased class sizes in the forseeable future. Let us pray for a day this turns around. To control costs teachers who retire are not being replaced in many cases.

I think one of the key words here is auditor. The budget was recenlty audited and given high marks. I think any diretors or members of the public who think piles of money are laying around need to contact that auditor and ask him why he is not telling the truth because in reality that is what you are saying. This has to do with prudent budgeting as opposed to political pandering. I loathe to think that people are playing politics with the education of our children but it is not hard to see that this is all about election 2013 and nothing else.

Mr. Ballard thank you for addressing the reserve fund balance issue. Now will you please explain what you and the board are doing to reduce the exorbitant class sizes? 32 students in a second grade classroom are completely unacceptable! This especially troublesome as district staff have indicated there are currently no plans to alleviate this situation for the fall. It’s time to make the education of our children the first and foremost priority of the school board.

Chuck, hope this helps you. I'm by no means advocating this (as you might see from my posting at another recent article), but a school district can function with a very low reserve/fund balance. The 5% that EPSD using recently is reasonable. But, large sudden changes in the fund balances are even worse than having a low fund balance.

To wit, you might recall the situation for the first budget that I had to deal with during my tenure on the board more than twenty years ago. For 1990-91, the superintendent proposed a budget with about a 28% property tax increase because in the year before, he and the Rust board spent down the fund balance from over $1.2 million (about 4% of the budget) to less than $250,000 (less than 1%). Basically what happened was that spending was increasing at the rate of over 4 mils per year, and in one year, EPSD needed to make up for two years of increases never mind replenishing the fund balance. We ended with, I think a 22% tax increase that year, and a 10% tax increase the next year (limited by the last reassessment), and it took several years to get the balance above $250,000. We functioned reasonably well with a 1% reserve for most of 89-93.

The board you call call the CEPTA board is the group that had to suffer through this problem and cured it, setting the stage for the facility improvements that followed later.

I'm not advocating for a 1% balance today - 5% seeems reasonable, but if it's higher, it should be metered out very carefully.

Mr. Ballard – saying that there is nothing real about the extra six million dollars the school district has collected is disrespectful to the tax payer. It was real when it left my pocket and it's really sitting in the district bank account. Calling people names like delusional and snake oil salesmen doesn't make what we are saying untrue. It's embarrassing for me to see the president of the school board using insults and bullying instead of intellectual arguments to make his points.
You talk about revenue and expenses, well here are the numbers showing the difference between revenues and expenses: 2002/2003 + 466,158; 2003/2004 -533,678; 2004/2005 -907,750; 2005/2006 +993,701; 2006/2007 +941,254; 2007/2008 -237,596; 2008/2009 +1,907,410; 2009/2010 +310,927; 2010/2011 +1,690,326; Net increase in fund balance of $4,630,752 over the past nine years. This is in addition to the 5% budgetary reserve. No snake oil, just real money adding up. Every year when I find I overpaid my federal taxes I get a tax refund. The same thing that causes me to get a refund from the federal government is happening here, we are overpaying some years and the money is adding up. Why is it wrong to say this excess money should be given back? I have a question for all the people who think EPSD should keep the excess funds. Do you tell the federal government to keep your tax refund? If you don't and you request your tax refund, why can EPSD keep your overpayment?

I'm a realist; I know if you manage the budget properly eventually you reach a point where tax increases will be required to keep up with increased expenditures. All I'm saying is if the money is there, and in this case it appears that it is, give the taxpayers a break. Don't raise my taxes if it's not immediately needed.
As far as your constant blaming of inflation, I wonder if you really know what you are talking about. The cause of inflation is an increase in money supply without an equal increase in productivity. It is caused because the federal government prints money to cover their big government spending. It is not the reason EPSD needs to raise taxes every year. Inflation doesn't cause salaries and pension costs to go up. I'm still studying the pension issue, but the salaries are definitely the fault of the board.
If anyone wants to see the meeting or the handouts Mrs. Donches presented they are available at http://epcat.us/

Giovanni if you really believe their is excess money laying around please explain why the auditor did not address this. Perhaps a request can be made for him to come back in and assess your claims. Maybe he can at least send in a letter or a brief. This assumes of course that your claims are not purely political in nature. By the way, somebody told me once that you tried to falsely claim the borough of Emmaus had no money to plow snow off the streets to help your quest for office in the election. Is that true by any chance? Also, what is your opinion of this saying: One is entilted to their own opinions but not their own facts?

@ts - The auditor would have little to say because all of the numbers for fund balance and reserve are out in the open and the differences people have here are more a matter of philosophy than anything else. It is very debatable whether the right size is 3% or 5% or 8%. Indeed there might not even be a right size! My point here now and before is once you have a decent balance, be very careful how you use it.

As an aside, people in general are making to much avout the audit. A good part of the audit is to make sure that proper administrative controls are in place to make sure that no one has the hands in the till. They don't check every transaction, rather they check procedures and a small sample, and come up with conclusions that there aren't any red flags. Usually auditors are experienced and thorough enough to know where to look for problems. Sometimes they're not, ala the LMT problems a few years back. None of this is to suggest that there is a problem at EPSD. Passing an audit with few comments or recommendations is alway a good sign that everyone is doing there job right, but then, that is also an expecation.

Finally, most audits won't say too much about fund balance, unless it was negative. I mentioned before about the balance that fell from 4% to 1% in the 89-90 budget that was passed right before I was elected, and the audits that came out after that said little. I doubt that they would complain about exceeding 8%, either, since the law there is murky.

truth seeker – Please go look at the budget for yourself. The money is accounted for right there in the fund balance. The administration said it was there; all I did was look and point it out. The auditor also agreed it was there, you referenced the audit in a previous post. Didn't you read what it said?
My claims are not "political in nature". I am asking a simple question. When the ending fund balance significantly exceeds the budgetary reserve why don't we use those excess funds to avoid a tax increase? No cuts, no magic, no blaming teachers, just use the excess to offset the tax increase.
As far as Emmaus goes, they shouldn't have any trouble paying for snow removal. They raised our taxes $50,000 and then posted a surplus 2 weeks later of almost $550,000.
Now I ask you your opinion of the saying - One is entitled to their own opinions but not their own facts?
Please live up to your screen name.

To use this money would be a one time feel good measure that would put future budgets at great risk. I see the numbers just as well as you do. The difference is that you want to use it as if it is just extra stuff laying around. Perhaps what one might call a slush fund. The East Penn Press give a good explanation as to why it cannot be used as you are sugesting. I'm saying that the auditor most likely would have mentioned that the district had a large excess that it did not need from year to year if that was the case. I really think you guys should bring him in on this. That way we could be sure it is not political.

Rob if unions controlled the state government then kindly explain all the cuts to educaton from the state. Unions can lobby just like business interests, oil companies, environmental groups, corporations etc. However, they don't control the government or the pension system. Unions do not control the PESERS board. You don't like the teachers union that's fine. Please don't try to imagine things that are not true. If you feel I'm wrong provide some evidence.

Not sure where your numbers are coming from but in PA the teahcers union has given to both parties although more to Dems. from what I understand. The pension mess is serious. In 2010 the legislature did some things to help the situation. They overturned the idiotic decisions of the Ridge Administration which will help. The economy improving the investment returns will also help. However, the system that was used from 2001-2010 is the problem and that cannot just be undone. The system can be changed for new teachers being hired but that won't make much difference in the near future. Sorry but that is the truth. No amount of lobbying from a union or anybody else can change these facts. This very issue was actually ruled on not long ago in the courts. They can't just undo the pension arrangement from those years I mentioned.

Well, since school board members are unpaid volunteers, and some of us are senior citizens on fixed incomes, they got nothing either. Any senior citizen who qualifies for the state property tax and rent rebate program can get another matching amount from the East Penn District by applying for it through the business office. Forms are also usually stocked at tax collector's offices. That is a program that we have had for years, and it is a program we are not required to have. Over 400 deserving senior citizens took part in the program last year. I agree that property taxes are regressive, but it is up to the legislature to do something about that. School boards have no choice in the matter.

Lots of cuts have been made. For the first time in the history of the East Penn School District, the budget last year was less than what was spent the year before. The problem is, there aren't enough cuts legally available without cutting programs, to make a zero tax increase possible. You want a zero increase, you come out and say what programs you want to cut out, and defend those cuts in public. Don't point to prudent reserves and say that one time available money should be used to artificially reduce tax rates. The only way to lower taxes is to cut expenses to the point where revenue matches expenses. That only works short term, because despite what Mr. Landi says his definition of inflation is, it is a fact of life and has been operating in the US for over 150 years, averaging 3% for that WHOLE time. At some point, it has to catch up with you, no matter what you do, and taxes will go up (again).

Mr. Ballard – It may be the first time in EPSD history that the budget was less than the previous year, however if my projections are correct the district's expenditures will be $2 million more this year than last. Even with this increase in spending it appears the district will add approximately $1.5 million to the ending fund balance, and that doesn't include the additional $1.25 million PLANCON money that came in. Makes you wonder if the preliminary budget is the only budget not worth the paper it's printed on.

I'm glad to see that you are finally admitting that the excess fund balance exists. Now it's called "prudent reserves". I guess one man's "prudent reserves" are another man's "excess funds". Maybe the difference is whether you are the person who collects the "prudent reserves" or the person paying the "excess funds".

The taxpayers agree with the board that we should have prudent reserves. The state recommends 5% and so does the board. I have no issue with a 5% reserve, I think that's good planning to have this reserve, but if the ending fund balance exceeds 5% then I think these additional funds should be put towards the next year's tax increase, and if it zeros out the tax increase then that’s great for the taxpayer. It may mean we overpaid the year before, but since it offset a current tax increase it will balance out. If in the following year revenues or expenditures fluctuate and we spend some of the 5% budgetary reserve I would expect my taxes to increase enough to cover replenishing the spent funds. If you don't raise my taxes on surplus years then I trust that you are only raising my taxes because you need to. However, when you have a surplus for 6 out the last 9 years and you continue to raise my taxes anyway I start to wonder if it is necessary or if it's the only way you know how to make a budget.

My definition of inflation is the same as yours. I'm just pointing out the cause. I have done a lot of reading on this subject and recommend a terrific essay at the Ludwig von Mises Institute by Murray N. Rothbard http://mises.org/daily/3127

Giovanni and others who agree that we can use this supposed extra money in the budget to have a large tax giveback: If what you say is true than you must believe that 5 voters on the board would rather not replace retiring teachers and raise taxes 1.9% (or whatever the number gets down to). Both of these decisions are unpopular and one leads to larger class sizes which nobody wants. If the extra money exists or has existed for years as you claim, what would be the possible motivation to hold onto the money?

truth seeker – That's a very good question and honestly I don't have an answer for you. I don't think it's for nefarious reasons or because they don't care about education. Maybe they didn't do the research like we did; maybe they just trust the administration (a little too much). Maybe they believe all the scare tactics that are used to paint a doom and gloom scenario if they don't follow the superintendant's recommendations. Parents are worried their kids won't get a good education, and property owners are concerned that their property values will drop, so out of fear they believe the worst. The media also provides cover for them by saying things like "siphoning money out of the fund balance" instead of "spending down the excess taxes collected to the required 5% budgetary reserve" (sometimes perception is reality) or not presenting both sides of the story for example the East Penn Press article you mentioned above quoted Mr. Ballard, but no counter points from Mrs. Donches were included. That's about as fair and balanced as Fox News.

We all want what's best for both the kids and taxpayers. It's a difficult balancing act, but I would rather have seen a teacher added and class sizes decreased than to have the excess fund balance continue to grow. And speaking of teachers, I'm bothered by the constant blaming of teachers. I can't speak for all the teachers in the district, but the teachers my children have had are fantastic and my kids love them. I don't think it's fair that the teachers took a pay freeze to help "save" this year's budget and now it looks like there will be another surplus. I would be mad if my company claimed times were tough, asked me to take a pay freeze and then posted a profit for the year. But for some reason the teachers keep supporting them.

Maybe it's time to think outside the box. We know young kids benefit from smaller class sizes and colleges pack a lot of students into lecture halls. Maybe we should decrease the class sizes at the elementary schools by taking teachers from the high school. This would benefit the young kids while preparing the juniors and seniors for the type of learning they will be expected to do in college.

Thanks for real, that seems very reasonable.

Chris, Thank you for your comment. Referendum would be the best way to handle these problems, by letting voters decide. Nice comment.

Agreed tax enough. I also think we should have a referendum on military spending, prescription drug plan for seniors, to extend or not extend the bush tax cuts, foreign aide to Pakistan, Corporate tax cuts in the state budget, Cyber school funding, privitization of the liquor industry, How much we need to pay into the NIZ, etc.

Sorry you feel speaking the truth is elitist. Over my time on the school board, I have voted 3 times for zero increase budgets, when the expenses were balanced with the revenues. I have also stated time and time again that one-time revenues should only be used for one-time expenditures. Using one-time money, especially one-time money that isn't really available, to balance a budget is dangerous, and in the case of the proposals made so far by EPCAT or CEPTA, whatever they are trying to call themselves these days, just plain stupid. I'm not going to make stupid decisions just to make someone politically happy. If you want a zero tax increase budget, put your money where your mouth is and propose what programs you want cut to achieve that. And don't start with sports, or claim that 'Taj Mahal' stadiums are something that would achieve that goal. Less than 1% of the budget is spent on such things. You need to cut 2-3%, or more. That means you have to cut some educational program that will cause pain to someone else, and you need to man-up and be willing to tell that person that they are not going to get the services they got next year because you do not want to see any tax increase. Don't talk about seniors losing their homes either, because East Penn provides for deserving low income seniors by providing a matching tax rebate meaning they get TWICE what the state gives them back in real estate tax rebates. Or just admit you don't want to be paying anything.

Mr. Ballard

If you think one time funds shouldn't be used to balance the budget then why did you approve a budget that uses 4 million dollars of one time funds to balance the budget? Why didn't you give the superintendent the same lecture you just gave us since that's exactly what he proposed? Shouldn't you be instructing the superintendent that the 4 million dollars needs to be raised through a tax increase not from the surplus?

Neither I, nor any individual member of the board, 'instructs the superintendent'. A board vote tells the superintendent what to do. I made my comment that using 4.1 million was dangerous. Using more of the fund balance than that would be suicidal. I was also quoted on that comment in the news also. Using one-time funds other than the fund balance to do anything with the budget is just plain stupid. The final budget hasn't been proposed or voted upon yet. You may have to live with danger. You don't have to live with stupidity.

I don't really believe that the administration is proposing a budget that plan would spend $4 million of the fund balance, or that the school board would approve such foolishness. At the May school board meeting, Mr. Alan Earnshaw said that they are planning the $10 million balance (a one-time resource) in less than 3 years, and I read in the paper that the superintendent echoed with similar remarks at the first June meeting. If true, that in itself would be disasterous and suicidal.

But that is exactly what is in the budget. In fact, it could be worse if they need to spend any of the reserve. But, I DON'T THINK THIS IS THE REAL PLAN. There's more to this than meets the eye. After all, the budget approved last year (for the school year now ending) also had an alleged $3+ million dollar deficit, and the one before that had a $2+ million deficit, even if none of the $5+ million of the reserve was spent in either year. Has EPSD really been spending down the fund balance every year? If so, it would all be gone by now! It isn't. EPSD projects a $10 million begining balance this year, even though last years budget showed ending with only $0.02 millionalong with a $5 million reserve. How is that happening?

One can only conclude that it's doubtful that any of the stated $4 million deficit will be spent next year. Nor will any of the official $6 million reserve be spent, either, since it is rarely touched.