Millage down, but Allegheny County tax bills vary

More than half of county's school districts hiked taxes

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Although 41 of the 42 suburban school districts in Allegheny County lowered millage rates in their 2013-14 budgets because of the countywide reassessment, taxpayers should not be fooled into believing they will receive lower real estate tax bills this year because more than half of the districts still raised taxes.

Twenty-five districts included real estate tax hikes permitted under state law and some also took advantage of exceptions for pension payments, which this year rose from 12.36 percent of payroll to 16.93, prompting large increases for districts.

However, individual home-owners' tax bills will vary this year because some properties increased in value with the reassessment, while others decreased. Many are under appeal.

PG graphic: School budgets
(Click image for larger version)

State law prohibits school districts from reaping a windfall from the reassessment and required boards to lower their millage to a revenue neutral amount.

Districts are permitted under state law to increase taxes, without going to referendum, by a percentage that is known as the Act I index, which varies by district. Annually, the state Department of Education calculates a school district's Act I index based on a complicated formula that takes into account market values, personal income and other economic values. School districts with lower wealth may have a higher index. The index can vary this year from 1.7 to 2.8 percent, which is applied to a district's millage rate.

Districts also are allowed to raise their millage rate beyond the index for certain costs, such as pension contributions, school construction costs and special education.

East Allegheny is the only district in Allegheny County not to lower millage due to the reassessment, but superintendent Roger D'Emidio said the district will not reap a windfall.

"The district will not have extra millage to work within our current budget and we do not anticipate extra revenue due to the increased assessments. Many of those assessments are under appeal or have already been lowered," Mr. D'Emidio wrote in an email.

District officials throughout the county cited the pension contribution hike, increases in salaries and benefits and the increasing cost of charter school tuition as the major factors for pushing up costs and requiring tax hikes. The higher pension contributions are needed to start paying off the $41 billion debt in the pension system.

In Clairton, the district with the county's largest millage hike -- at 1.23 -- the reassessment of the U.S. Steel Clairton Works was the most significant factor in the budget, costing the district $320,000 in tax revenue from its $14.49 million budget.

In addition to raising taxes, a number of districts tapped their reserve funds to fill holes in their spending plans, a practice that budget experts say is dangerous because reserves will eventually be depleted if large amounts are being used.

While furloughs were not rampant as they have been in the past two years, a handful of districts were still affected.

The Penn Hills board laid off 11 teachers, 15 teacher aides, two maintenance supervisors and a transportation supervisor.

Plum laid off four teachers.

Sto-Rox laid off three teachers, an elementary librarian and the home/school visitor. A music teacher's position will be cut to half time and a maintenance worker and secretary were laid off. In addition, the boys baseball and girls softball programs were eliminated.

Gateway furloughed 18 lunch aides, a maintenance worker, two clerical staff and administrative secretary. In addition eight teachers were furloughed but expected to be called back when new positions are created at the start of school.

Officials in a number of other districts said they plan to reduce staff by not replacing employees who are retiring.

"It's a very fair generalization that unless there's rather extreme or urgent circumstances, vacancies just don't get filled," said Jay Himes, executive director of the Pennsylvania School Business Officials Association.

While class size determines the workload for teachers, in the administrative ranks, there is no barometer for workload; staff reductions often mean administrators now are wearing multiple hats and have increased duties, Mr. Himes said.

Statewide, the number of school employees has decreased more than 20,000 since the 2010-2011 school year. After that year, $1 billion was cut from the state education budget when federal stimulus funding disappeared and Gov. Tom Corbett chose not to use state funds to fill the gap, according to information from the state Bureau of Labor Statistics provided by the School Business Officials Association.

Mr. Himes said the percentage of districts raising taxes in Allegheny County is lower than the statewide trend of about two-thirds of districts imposing tax hikes this year.

But Allegheny County districts are in line with others in the state in using money from reserve funds to balance their budgets. "There are some staggering numbers using their reserves," Mr. Himes said. "It's a question of how much and how fast and whether they can sustain it for another year or two. If not, I think we are in for some significant fiscal issues."

In the McKeesport Area School District, $4 million from the reserve fund was used to balance the 2013-14 budget, leaving $6 million in the fund.

"Some people say that's what a reserve fund is for: a difficult time. But it's been a difficult time for a while with a lack of any kinds of additional revenues from state or federal sources. Eventually the reserve fund will be used up," said business manager David Seropian.

Other districts using funds from reserves include Steel Valley at $2 million, Moon at $1.2 million, Shaler Area at $1.5 million.

Also statewide, districts continue to add "pay-to-play" and other fees, said Steve Robinson, spokesman for the Pennsylvania School Boards Association.

Locally, the Mt. Lebanon district will increase parking fees from $50 to $75 per year, and new activity fees for high school and middle school students will go into effect.

"Districts are always looking for innovative ways to raise revenues without having to raise taxes," Mr. Robinson said. "It doesn't usually pay the entire cost, but it helps defray the cost."

Correction, July 15, 2013: The tax rate for the Fox Chapel Area School District was updated in the chart. It was incorrect in an earlier version of this story.

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Mary Niederberger can be reached at or 412-263-1590.


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