School budget planners weigh need for tax hikes during tough times
Tight school finances will force many Pittsburgh area homeowners to face higher property tax bills. A murky revenue forecast coupled with growing expenses had school districts struggling to balance 2002-03 spending plans.
Of 47 districts surveyed by the Pittsburgh Tribune-Review, 15 lowered tax rates from last year while 11 raised rates. One district, Elizabeth-Forward, failed to pass a budget by the state’s June 30 deadline, but is weighing a tax hike.
Unlike suburban districts, Pittsburgh Public Schools budget on a calendar year.
School taxes may account for 70 percent or more of a homeowner’s annual property tax bill.
Plum residents are bracing for a 3.5-mill tax hike. The Plum Borough School Board approved a $38.23 million budget that raises the tax rate by 23.5 percent to 18.4 mills.
Taxes will increase by $350 to $1,840 for a Plum property owner with a home valued at $100,000.
Homeowners in the West Mifflin Area School District also are facing a tax increase. The school board raised the tax rate by 1.16 mills to 18.09 mills. Under the $37.56 million spending plan, a homeowner with a house valued at $100,000 will pay an additional $116 in district property taxes.
Taxes also rose in the East Allegheny School District, where the rate jumped from 17.5 to 19.3 mills. The millage increase means a homeowner with a home valued at $100,000 will pay an extra $180 this school year.
Other districts, including Gateway and Penn Hills, were able to keep the tax rate steady or lower it slightly. In some districts, revenue was buoyed by increases in property assessments.
The Penn Hills School Board held the tax rate at 18.25 mills to balance the district budget at $52.73 million.
The Gateway School District tax rate remained 16.55 mills.
The impact of the prolonged reassessment process varies for each homeowner. Some homeowners saw taxes drop while others were hit by dramatic increases in assessed home values that swelled property tax bills even in cases when district tax rates dropped or stayed the same.
The Elizabeth-Forward School District is at an impasse over a proposal to raise taxes. The district is the only one in Allegheny County that failed to meet the state’s June 30 deadline for passing a budget.
The board met for five hours June 30 in a last-ditch effort to finalize a budget, but wound up deadlocked over an .817 mill increase that would have raised taxes to 21.427 mills.
“They don’t want to raise taxes if they don’t have to, and they can’t agree on what to cut from the budget,” said Jane Filowat, Elizabeth-Forward spokeswoman.
Nearly 90 percent of the district’s costs are fixed, including salaries, utilities and health care. Debate rages over what to trim from the remaining 10 percent of expenses, Filowat said.
The board faces a $1.6 million shortfall in the district’s preliminary $29.03 million budget.
An early proposal to eliminate extracurricular activities, including sports programs, met with strong opposition.
Also at issue is the hiring of three new teachers and a guidance counselor at an estimated cost of $150,000.
The board is expected to tackle the budget again July 10.
Under state law, board members’ positions and school funding could be jeopardized by a failure to adopt a budget.
Murky revenue forecasts have further complicated budget woes for many districts.
“It’s very complex, especially this year, given that we don’t have a clue how many people are going to appeal their (real estate) assessments or how many are going to win those appeals,” said David Hall, North Hills School District director of fiscal management.
The North Hills School Board stared down a $2.8 million shortfall to balance the district budget at $52 million and maintain the current 16.5 mill tax rate.
“It was a tough budget year,” Hall said. “There’s no doubt about that.”
Seneca Valley School District taxpayers are facing their first tax hike in six years. The school board raised taxes 5.62 mills, or 5.6 percent, to balance the district’s $66.1 million spending plan.
The Penn-Trafford School Board also endured its share of budget problems.
Earlier this year, Penn-Trafford Superintendent Joseph Marasti warned of a potential tax hike as high as 5 mills. One mill brings in about $250,000 in tax revenue to the district.
Penn-Trafford Business Manager Richard Bratkovich blamed a state funding shortfall, among other factors, for the district’s budget struggles.
State funding is expected to rise by $140,000 over last year, down from annual increases of $400,000 to $500,000 in previous years, Bratkovich said.
At the same time, insurance costs are on the rise in the wake of Sept. 11. Penn-Trafford allotted more money for property and liability coverage. The price of medical insurance and prescription coverage also rose, Bratkovich said.
Declining interest rates also are taking a toll. Investment returns are expected to dip as much as $300,000.