Faced with a $4.4 million deficit in next school year's proposed budget, Hempfield Area officials Monday night mulled over a tentative list of $1.7 million in spending cuts and anticipated raising taxes by 3.42 mills. That move would require state authorization under the new Taxpayer Relief Act, also known as Act 1.

The law, reportedly crafted to create property tax relief through the use of gaming revenues, also created an annual inflationary index that dictates to school districts their maximum allowable property tax increases. School districts that raise taxes higher than their index numbers must seek approval from the state under any of 10 exceptions or get voter approval through a referendum.

In Hempfield's case, officials hope to exceed their allowable increase of 2.69 mills by applying for exceptions related to previously fixed staff retirement and debt service expenses, said business manager Peggy Gillespie.

If approved by the state, the two exceptions would allow an additional increase of 0.73 mills, or 3.42 mills total. "I couldn't, in good conscience, recommend to this board that we stick with the index," Ms. Gillespie said.

But additional tax money is not enough to fill next year's revenue hole. So school board members turned their attention this week to a cut list.

The two-page document proposed $1.7 million in spending reductions, targeting everything from an annual sixth-grade science field trip at a cost of $22,000 to a $42,000 reduction in the $342,000 computer leasing program.

The school board balked at slashing an annual ice hockey club contribution, part of the school bus leasing program and an after-school program for at-risk high school students.

"The list is evolving," Ms. Gillespie said Tuesday. "The administrative team will go back and review everything one more time."

Board members also must decide whether to use an anticipated $900,000 surplus from the 2006-07 school year to offset next year's expenses or to add that money to the district's $2.7 million fund balance.

A significant unknown in this process is the district's unresolved teachers contract, Ms. Gillespie said. The district has been negotiating with its teachers union for more than a year. The previous contract expired Aug. 31. Negotiators were scheduled to meet again last night.

In addition, officials have not received next school year's insurance rates, state funding numbers or teacher retirement notices.

In accordance with the Taxpayer Relief Act, the school board must approve the preliminary budget by Jan. 25 and submit it to the state next month. The board next meets Jan. 22.