Mt. Lebanon school board eyes property tax increase

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Mt. Lebanon School District residents could face a property tax increase of about 0.55 mills for 2014-15.

School board members discussed potential ways to close a $2.6 million gap to balance next fiscal year’s budget Monday, using a combination of more tax revenue, reduced expenditures and some of the district’s surplus money. Not under consideration is closing schools.

“The community has repeatedly told us they were not in favor of that,” said Elaine Cappucci, board president.

She directed superintendent Timothy Steinhauer to examine how a tax increase “somewhere in the 0.55-mill range,” coupled with drawing either $750,000 or $1 million from the district fund balance, would help bring revenue more in line with the $88.3 million in estimated expenditures for 2014-15. He then will prepare a preliminary budget for consideration in April, and the board is expected to adopt a final budget in May.

With a 0.55-mill tax increase, a property owner with a home valued at $100,000 would pay $55 more in property taxes. The current tax rate is 22.61 mills.

The fund balance, money the district sets aside primarily for unanticipated expenditures, is about $5 million.

Janice Klein, director of business, said she recommends using no more than $750,000 of that amount toward balancing the budget. Some school board members said they favor using up to $1 million, citing a preference for using more of the surplus to mitigate a tax increase.

Board member Dan Remely suggested using an additional $500,000 from money the district has earmarked for retiree health care costs, while limiting a tax increase to 0.25 mills.

“I think we need to utilize some of those funds to keep that millage down and not lose some of our programs,” he said.

As with Pennsylvania’s other school districts, Mt. Lebanon faces an ever-increasing obligation to fund the Public School Employees’ Retirement System. Employer contributions to the system have nearly quadrupled in the past five years, from 5.64 percent of salary in 2010-11 to 21.4 percent in 2014-15.

For Mt. Lebanon, meeting the added obligation for next year is the equivalent of 0.44 mills, which accounts for most of the proposed tax increase.

Meanwhile, Gov. Tom Corbett’s budget calls for no increase in basic education subsidies and an additional $37,723 to Mt. Lebanon for special education funding. Also, the state has not paid $600,000 due to the district for reimbursable costs associated with the $109 million high school renovation project.

“The governor has caused a lot of damage to the budget here, and I’m sure everyone would agree with that,” said school board member Michael Riemer.

In addition, federal funding for Mt. Lebanon has dwindled from $554,050 in 2010-11 to $150,000 for 2014-15.

District property tax increases have average 0.55 mills annually since 2006-07. For 2011-12, taxes rose by 2.52 mills to start paying for high school renovation. There were no increases for 2008-09 and 2012-13.

Since 2009, the district has reduced the number of staff members from 703 to 654.

Harry Funk, freelance writer:

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