• Mount Pocono Boro*

The Other Shoe Drops Softly: PMSD 2020 Property Taxes Will Not Increase

SWIFTWATER (MAY 21 2020) - To the great relief of taxpayers, the preliminary budget adopted last night by the Pocono Mountain School District Board of Education did not include a tax increase.


The budget sets the new post-reassessment millage rate at 19.905 mills. As you probably already are well-aware, the 2019 county-wide property reassessment increased the assessed value of all properties in the county to 100% of the (purported) value. As a result, taxing authorities were required to reset their millage rates to reflect the new tax base. Under Pennsylvania law, in the event of a county wide reassessment, taxing bodies are prohibited from increasing their tax revenues more than ten percent in the first year under the new assessments.


Municipalities and the county were required to set their 2020 tax rates prior to the end of 2019. Most did not raise their tax revenues for 2020. Mount Pocono Borough was an exception, taking advantage of what one council member called "a golden opportunity" to increase taxes almost the full ten percent. School property taxes being the largest portion of the property tax liability, residents have been waiting for the district budget process to learn the full impact of the reassessment on their tax liabilities for 2020. Unlike municipalities, school districts operate on a fiscal year running from July 1 to June 30, so their budgets are not adopted until mid-year. Last night the PMSD approved their preliminary budget, and the final budget will be adopted at the June meeting of the Board (which was moved to Thursday, June 4, to permit administrators to attend the Jim Thorpe graduation at Pocono Raceway as part of the Pocono Mountain graduation planning for the same location).


The district budget projects 2020-2021 real estate property tax receipts under the new millage rate to be $122,232,338, which is $3,329 above the receipts of the 2019-2020 fiscal year.


PMSD Chart of Local Revenue Sources through the last three fiscal years and projected for 2020-21

The property tax receipts account for slightly over half of the total $221,750,000 budget.



PMSD Chart summarizing projected revenue sources for 2020-21 budget

Mount Pocono residents will be billed $5.2 million in property taxes to support the district's budget. Tobyhanna property owners will get the highest bill, at nearly $32 million, followed by Coolbaugh at $28 million, and Pocono at $27. The district is projecting actual collect rates of 92.5%.



Projected gross and net real estate taxes by municipality. Chart courtesy of PMSD

Total receipts by the district are, once again, substantially less than the expected expenditures. Instead of raising taxes, the district is again using millions of dollars from its reserve fund to make up the difference. Last year, the district use $5,000,000 from the fund to balance the budget; this year they are increasing that to $7,000,000. A number of board members expressed concern that the reserve fund was being depleted



PMSD Chart showing the Fund Balance prior to the use of $7,000,000 to balance the 2020-21 budget


The Fund Balance was over $31,000,000 prior to the 2019 school year. After the 2020-21 term, the balance will shrink to just over $19,000,000. After brief discussion, the board unanimously agreed that, in the words of Board President Rusty Johnson, "This isn't the year" to address the shortfall with budgetary cuts or tax increases. The Fund, he said, was intended as a "rainy-day" fund for emergency expenses. The Board agreed that this was an appropriate year to use the $7,000,000, particularly given the continuing uncertainties surrounding the public health crisis. Residents can estimate their total property tax liability using The Boro's* 2020 Property Tax Estimator.


The final millage rate may be slightly adjusted depending on the result of several pending tax appeals. The final budget is expected to be adopted in June.

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