New Castle News

May 31, 2012

Shenango budget includes tax hike

John K. Manna
New Castle News

NEW CASTLE — The Shenango Area School Board has introduced a budget calling for a 4.8 percent increase in the property tax.

The $15,776,780 spending plan for the 2012-13 school year is approximately $150,000 higher than the current year’s budget.

All seven members at Tuesday’s special meeting voted in favor of the budget. Board president Albert Burick and Joseph Gaus were absent.

Under the proposed plan, the property tax will increase from 11.79 mills to 12.36 mills.

The increase represents an additional $57 per $100,000 worth of a property’s assessed value.

Dr. Michael Schreck, acting superintendent, said the state granted the district’s request for an exception to increase the tax above the 2.4 percent index based on an increase in the district’s retirement costs.

The index, set by the state, is the percentage the district can increase the property tax without voter approval. Granting of the exception allows the district to increase above the index, also without voter approval.

Without the exception, the district would be limited to increasing the tax to 12.07 mills.

Schreck said an additional $250,587 will be paid into the retirement fund for district employees. It represents the biggest increase in the budget, he said. The district’s retirement fund cost this year totaled $718,995.

The contribution rate is set by the Public School Employees’ Retirement System

Another major increase will be health insurance costs, which are rising by 9.84 percent, Schreck said.

Under a four-year contract ratified in April, teachers will take a pay freeze in the coming year.

No programs are being cut, Schreck said, but half of a high school reading and two elementary teaching positions are becoming vacant because of retirements and will not be filled.

Also at Tuesday’s meeting, the board eliminated the position of assistant superintendent, which had been occupied by Schreck until the resignation of superintendent Eugene Thomas in April. The board intends to name Schreck superintendent, but tabled action until June 11 to “clean up” language in the contract, he said.

Schreck said even with cuts, the district “still fell short of having a balanced budget.”

“We had an increase of 1.77 percent in operating expenses and to keep our facilities going.”

The district is not dipping into its fund balance, which with its capital reserve totals $3.579 million.

Schreck noted the board has taken money from the fund balance the past three years.

“We projected four years out that if we don’t ask for a little bit more in taxes the fund balance would be significantly depleted.”

The major reason for the possible depletion is retirement costs continuing to increase, he said. Plus, buildings and grounds “constantly need upgraded.” The board has tried to project over the next 10 years what it will cost for improvements to the elementary and high school buildings.

Schreck noted the district has raised taxes only twice in the last 10 years, adding Shenango still has the lowest millage in the county.

(Contact reporter John K. Manna t (724) 654-6651, extension 624, or email: jmanna@ncnewsonline.com)