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School District Proposes Tax Increase in Preliminary Budget

by on December 22, 2014 6:00 AM

State College residents may see another tax increase in the coming months.

Randy Brown, State College Area School District business administrator, says the district has taken the first steps in the six month process of planning the budget for the 2015-2016 school year.

The district is coming off a strong year with higher-than-expected revenues and lower-than-expected expenses, but there are still plenty of challenges to tackle in the coming year.

“We do have a lot of rising costs. The contribution rates for [employee pensions] required by the state are going to about twenty percent of all of our salaries,” Brown says. “That’s a significant amount of money as compared to past years. In 2010-2011, we were only paying about five percent.”

Brown says the cost of employee benefits is also going up. The cost of healthcare for district employees is expected to jump at least ten percent, as it has every year in recent memory. 

To offset those costs, the preliminary budget proposes a 1.9 percent increase in the district’s property tax. While that's the second lowest proposed increase since the 1997-1998 school year, Brown says it works out to an additional $54 per year for the average taxpayer.

“We’re still very early in our budget process and we don’t know exactly what the tax increase will end up being, but we have to start phasing in the debt service for the high school,” says school board member Jim Pawelczyk. “Construction begins this summer, and the district needs money for that. That’s why we had our referendum almost a year ago: to make sure that our community could decide whether they were comfortable with that.”

State College voters approved extensive renovations and new construction at the high school at a public referendum in May. State law required the referendum because the taxes needed to fund the project exceed the amount the district can raise without a vote.

Brown says the tax for the high school project is separate from the 1.9 percent increase, which will exclusively fund the district’s normal operational costs. The tax increase for the high school project is anticipated to be about 2.6 percent, which works out to roughly $74 for the average taxpayer.

School district superintendent Robert O’Donnell says one of the district’s main concerns with the budget is to make sure it is able to provide the same level of services and programs to its students, which the district must balance with the needs of the taxpayers.

He has also proposed four “strategic priorities” to address in the budget, based on needs he has seen in the district: providing additional mental health resources for students struggling with anxiety or depression; updating the K-12 English and language arts curriculum; meeting new requirements for gifted learning evaluations; and evaluating how the district is meeting long-term planning goals.

“We have six months to work through this, and there are always changes to the budget proposal as we learn more,” O’Donnell says. “We don’t even know Governor-Elect Tom Wolf’s state budget plans yet.”

Wolf identified increasing funding to education as a key part of his campaign platform. His budget proposal is expected to come out in March. 

Brown says the preliminary budget is expected to be approved in February, with the final budget expected to be presented to the school board in May. The budget is tentatively scheduled for final adoption on June 8.

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Michael Martin Garrett is a reporter and editor for StateCollege.com who covers local government, the courts, the arts and writes the Keeping the Faith column. He's a Penn State alumnus, a published poet and the bassist in a local indie rock band.
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