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School Board Talks Tax Increase For 2015-16 Budget

by on April 13, 2015 11:50 PM

For property owners within the State College Area School District's territory, taxes will likely see a sizable increase for the coming year. 

The majority of the expected 5.49 percent increase in real estate tax, which the school board discussed at a meeting on Monday night, will pay the referendum tax on the high school renovation project.

The district needs to pay $85 million in debt service on borrowed funds for that project. The board originally projected a 6.09 percent tax increase in the budget, but business administrator Randy Brown says that a successful bond sale helped decrease that number to 5.49.

"The bond sale produced a lower interest rate than we expected," Brown says, "so the tax increase will be less than our preliminary budget projected it to be."

The average district taxpayer -- with an assessed property value of $71,686 -- will pay $2,988 in real estate tax under the  budget. That's $156 more than last year.

Brown also announced that the district still dedicates less of its budget to financing -- a category that includes things like construction projects -- than comparable districts.

"It's a surprise, but it's a pleasant surprise," says board member Scott Fozard.

While the vast majority of the district's funding is from local revenue, which mostly comes from the real estate tax, the district is hoping for some additional money from the state this year to lessen the burden of a proposed budget that includes $136,157,000 in spending.

Gov. Tom Wolf's proposed state budget would bring $826,000 in additional state funding to State College. Brown says that $326,000 would have limitations on how it can be spent, while the other $500,000 is a partial return of charter school funding that ended under former Governor Tom Corbett.

The proposed state funding is not included in the current district budget for the 2015-2016 budgetary year, as the board will wait until the state legislators end negotiations and pass a final budget to factor it in. 

While the board was largely pleased with Brown's presentation, which comes just two weeks before the final budget proposal which is due on April 27, board member Jim Pawelczyk has concerns.

"Our expenditures planned for this budget are about $4 million more than what we were planning for 18 months ago," he says. "There’s a couple really big growth areas like salaries, and professional services, and purchase services growing far more than we anticipated. I’m looking at that and seeing that our budget planning isn’t working very well at all, and that’s a concern to me."

Brown says that a number of factors, such as unexpected increases in charter school tuition and district internet network issues, contributed to the budget expenditures coming in well above projections. He adds that the district is improving at budget planning and is coming closer than in the past.

The board is scheduled to vote on a final budget on May 4.

 

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Zach Berger is the managing editor of StateCollege.com. He graduated from Penn State University in 2014 with a degree in print journalism. Zach enjoys writing about a variety of topics ranging from football to government, music, and everything in between.
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