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SUMMARY INTRODUCTORY LETTER FOR FACT FINDING
The Board of School Directors of the Northwestern Lehigh School District wishes to thank the Associationfor their work with the students in the Northwestern Lehigh School District. The Board recognizes theAssociation’s desire to seek additional compensation and benefits for the membership.As a Board we take great pride in our students and employees as well as the many positive accomplishmentsof the District. We value the hard work of all our employees and are acutely aware of the many challengesfacing our District and public education in general.The Board believes this economic recession combined with the lack of commercial growth and now lack of residential growth in the District will make it very difficult for the District to keep pace with the countyaverage for all employee salaries now and in the future. The Board expects the District will probablycontinue to have lower employee salaries than many of the other districts in Lehigh County that have muchstronger commercial property tax bases.The following are some very specific concerns the Board is currently managing that have an impact onincreased compensation packages for employees:Current economic recession is creating the following impact:
Reduced growth in real estate value
Sharp reductions of new properties in the District
(Township Zoning Offices)
Increased number of property assessment appeals the District has lost which decrease property tax income
Financial hardship for community members making tax increases very challenging for residents:
o
Unemployment – rate in Lehigh County is 9.2%, the highest in over 10 years
(US Bureau of Labor & Statistics as of June 2009)
o
Less growth in EIT than expected and budgeted in 08/09. Expecting a base decrease in 09/10as a result of unemployment and pay cuts
(data from EIT office)
o
Freezes/reductions in pay rates
o
Increases in employee contributions towards health coverage
o
Losses in 401(k) and other retirement plan investments and overall decline in interest earnings
o
Increased costs of products as a result of the poor economy
o
The Congressional Budget Office predicts that there will be no COLA for Social Securityretirement benefits until 2012 and then only a modest one. Our community’s retirees onSocial Security will not be receiving an increase to offset increasing costs.Act 1 Limitations
Board restricted by law in ability to increase property taxes
Limitation set by two economic factors – ECI/SAWW and District’s MV/PI aid ratio
Expect the ECI/SAWW to reflect the economic recession for the next two (2) years, possibly limiting theBoard to annual millage increases of 1.5 mills or lessStatus of protected property in the DistrictThere are 4,092 preferentially taxed parcels in Lehigh County as a result of Acts 319 and 515, and 2,046 or 50% of them are in Northwestern Lehigh. The taxable assessed value for these properties is approximately38.5% of the total assessed value. The District receives no real estate tax revenues for the remaining 61.5%of assessed value, which is equivalent to approximately $96 million. Additionally, the District receives nosubsidies to offset this loss in real estate taxes.
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