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State College School Board Approves Tax Increase as Part of Draft Budget

by on May 05, 2014 8:50 PM

The State College area school board approved a draft 2014-2015 budget Monday that includes a 1.95 percent tax increase.

The $125 million budget increases the millage rate by .7556 mills from 38.75 to 39.5056 or $39.5 per $1,000 of assessed property value.

The district says the increase would be $54 for the average assessed home value of $71,300.

The board approved the draft budget with an 8-to-0 vote.

School officials say the 2014-2015 proposed increase would be the second lowest tax increase in the district since 1999 and would be the lowest percent tax increase of any other district in Centre County. Last year, the district approved a 2.7 percent tax increase.

The budget includes an increase of $4.7 million in expenses, including $2.7 million under the state retirement pension plan, $1.3 million for employee health insurance and $764,000 for salaries.

School officials say the pension rates have increased from 5.6 percent in 2010-2011 to 21.4 percent for 2014-2015. The district has offset the impact by drawing down from an established fund balance.

The bulk of revenue for the district comes from local taxes with $82.9 million expected from real estate taxes.

The district will hold a public hearing on the budget at 7 p.m. June 2 before final approval June 9. Under state law, the district must pass a budget by June 30.

The tax increase for the 2014-2015 budget is separate from the proposed tax increase connected to the referendum question that will appear on the May 20 ballot for the Primary Election, which would help cover the cost of massive renovations to the State College Area High School campus.

All registered voters, including non-partisan voters, can vote on the referendum question, which will read:

"Shall debt in the sum of ($85 million) for the purpose of financing new construction and renovations for the State College Area High School be authorized to be incurred as debt approved by the electors?"

The $85 million loan in the referendum would ultimately result in a tax increase for property owners in the district.

The 7.2 percent tax increase will be determined based on a property's assessed value. The district calculated the percentage tax increase based on the 2013-2014 property tax rate of 38.75 mills, or $38.75 per $1,000 of assessed value.

For example, for a property with a $100,000 market value, the assessed value of the property would be $28,409 and the estimated annual tax would be $79 or $7 a month.

For a property with a $200,000 market value, the assessed value would be $63,920, and the estimated annual tax would be $178 or $15 a month.

The referendum tax would remain in effect until the debt for the high school is paid in full, which is an estimated 30 years.

The total project cost is estimated at $115 million with a 5.3 percent interest rate and a term of 30 years. The $30 million balance will be funded through the appropriation of a current tax.

School officials argue the school buildings are unsafe and in need of desperate repairs, including plumbing, electrical and heating, cooling and ventilation systems.

The two buildings at the high school campus reportedly do not comply with the American Disabilities Act. School board member Dorothea Stahl said Monday night that high school students with disabilities do not receive the same education as other students due to barriers that prevent them from alternating between the buildings located on different sides of the street.

In related news, the board approved a bid for partial roof replacement at Mount Nittany Middle School to Blair Roofing for $146,100. School officials say the roof is 19 years old and the district replaces roofs every 20 to 25 years.

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Jennifer Miller is a reporter for StateCollege.com. She has worked in journalism since 2005. She's covered news at the local, state and national level with an emphasis on crime and local government.
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