Image via Shutterstock
Image via Shutterstock

Property tax revenue will decline as people need more time to pay, and interest rate reductions will depress interest earnings, one expert said.

HARRISBURG, Pa. (AP) — Pennsylvania’s 500 school districts are facing a projected loss of as much as 5% in the revenue from local taxes as the coronavirus pandemic shutdowns take a heavy toll on the economy, a leading public schools group said Tuesday.

The Pennsylvania Association of School Business Officers said it is projecting a loss of $1 billion, or 5%, in revenue from local school taxes if economic recovery lags. A quicker turnaround could limit the damage to a loss of $850 million, or 4%, the group said.

School districts reported spending about $30 billion in the 2017-2018 school year, according to state data, the latest available for that statistic. About $17.5 billion in revenue that year came from local sources, primarily property taxes, and $11.5 billion came from the state, according to the data.

RELATED: Pennsylvania Schools Will Remain Closed the Rest of the Academic Year

Rising unemployment will probably mean a loss in real estate transfer tax revenue as the economic downturn slows the real estate market, Timothy Shrom, director of research for the school business association, said in a written statement.

Property tax revenue will decline as people need more time to pay, and interest rate reductions will depress interest earnings, Shrom said.

Meanwhile, a massive deficit facing state government, as well as a delayed July 15 deadline for filing taxes, is casting doubt on how much state aid schools can expect.