The Herald, Sharon, Pa.

May 21, 2013

School board proposes 1st tax hike in 6 years

By Joe Pinchot
Herald Staff Writer

HERMITAGE — Hermitage School Board is proposing the first property tax hike since 2007-08 under a 2013-14 budget tentatively approved Monday.

The real estate levy would go up 1.239 mills to 60.239 mills.

The significance of the 1.239-mill jump is that the figure is the most officials can raise the property tax without asking voters for a referendum or the state for exemptions because of jumps in specific expenses.

A mill is $1 for every $1,000 in assessed property value; assessments are a property’s 1970 market value.

A property assessed at $100,000 would see its property tax bill climb from $5,900 a year to $6,024.

The budget cuts teaching and staff positions and eliminates the in-car portion of driver’s education, but officials still are looking at raising taxes to offset expenses such as a 37-percent jump in retirement fund contributions, a 7-percent hike in hospitalization and  contractual employee pay hikes.

“The substantial reason for it (tax hike) is PSERS,” Business Manager Monique Barber said, referring to the retirement program that local districts and the state jointly pay into.

Retirement contributions steadily have increased since the economic downturn, and state officials expects the trend to continue.

While the district paid only 5.64 percent of staff salaries into the retirement account in 2011, it will pay 16.93 percent next year. The trend is expected to continue upward until the contribution rate reaches the low 30-percent range in 2019, at which point it will level out for some time, according to state projections.

The $28,444,395 budget is up 3.24 percent over this year’s spending plan. It cuts two teaching positions, a central administration position and a half-time maintenance position, Barber said.

School officials also will be talking about furloughing employees and cutting hours by the time the budget must be approved, June 31. Officials are not sure how many furloughs will go out, but the cuts will affect all areas of operation, Barber said.

State subsidies for regular education have not been what they were before the economic downturn and have not increased for special education for six years, Barber said.

Hermitage relies on local taxpayers for 60 percent of its budget - more than most other local school districts - but city taxpayers consistently have paid their dues, with the collection rate at 95 percent.

“Local revenue has remained steady,” Barber said.

While the tentative budget, if approved, would be the largest ever in the school district, the budget is less than $1 million higher than it was in 2008-09.

And, although parents will have to send their children to local companies for on-the-road driving instruction, the “integral” education programs remain in tact, Barber said.

The board will vote on a final budget June 20.