New Kensington-Arnold to raise taxes by 2 mills
New Kensington-Arnold School District taxes will rise by 2.4 percent under the 2018-19 budget approved by the school board.
The increase of two mills means that the total real estate tax rate for the district will be 85.27 mills.
Jeff McVey, director of administrative services, said the increase will add about $30 to the tax bill for a house with the district’s median assessment of $15,000.
“We’re looking at a shortfall of about $2.03 million,” McVey said.
Most of that shortfall in the $37.7 million budget will be covered by the transfer of about $2 million from the district’s budgetary reserve.
But that reduces the reserve to a critical level, according to McVey and Superintendent John Pallone. McVey said, if the board took no action toward raising taxes, the budgetary reserve would be down to about $179,000 by the end of the upcoming school year next June.
Pallone said that’s because the board has avoided raising taxes for the past four years. Instead, it has covered what have been annual budget deficits by using the budgetary reserve.
“This is the last year we have a reserve to tap into,” Pallone said.
Essentially, the tax increase will go to replenish that reserve account.
According to McVey, one mill of tax brings in about $113,000 in revenue to the district, so the increase will pump around $226,000 into district coffers.
Combined with what’s remaining in the reserve, that would give the district a reserve of at least $400,000 by next June.
“I don’t think this district can go with $179,000 in the fund balance,” board member Wayne Perry said. “I think it’s time to raise taxes.”
“It’s ridiculous to think that an operation as big as this can operate with a $179,000 fund balance,” John Pallone said. “It’s almost scary.”
Pallone and McVey said, aside from providing an additional $450,000 to $500,000 for pension costs as mandated by the state, expenditures, not including increases as a result of inflation, have stayed about the same.
“We don’t have any out-of-the ordinary expenses,” Pallone said.
However, contract negotiations with the district’s teachers, who are heading into a second year without a new contract, are ongoing. Pallone said the district is also taking that into consideration what an eventual contract agreement might mean in regard to the budget.
Pallone said, once that happens, a wage increase of some sort is likely.
Meanwhile, Pallone and McVey are hopeful that the district may increase its fund balance further by doing some belt-tightening during the coming year.
“The idea is, hopefully, we’re being conservative and we’ll be able to return more money to the budget,” McVey said.
The district’s budget for the coming year is down about $1 million from last school year’s. Pallone said about half of that savings came from teacher furloughs and the rest from across-the-board budget trimming.
Tom Yerace is a freelance writer.