Accelify Blog

School Taxes Rising (PA)

June 15, 2010

Property owners in more than two-thirds of the school districts surveyed in the Cambria-Somerset region will be seeing their real estate taxes increase this year to cover 2010-2011 budgets.

Of the 16 districts interviewed by The Tribune-Democrat 10 have already passed or are looking at tax increases ranging from a low of just more than a half-mill in Windber to a high of 4 mills in the Northern Cambria School District.

School officials say they are struggling with spiking healthcare premiums and bracing for increases in electricity costs.

But the greatest concern is the looming pension crisis with many educators eager to begin putting money aside.

The scenario in the Cambria-Somerset region is being played out in many other areas across the state, said Dave Davare, spokesman for the Pennsylvania School Boards Association.

“We’re seeing a whole mix of things this year,” Davare said.

“Many are taking a little bit (in additional tax revenue) at a time rather than taking a large chunk later.”

Some districts are reducing staff by not filling vacancies.

Others are changing educational programs and reducing staff through furloughs, Davare said.

In 2012, the cost of subsidizing pensions for teachers and state employees likely will jump from the current less than $1 billion to more than $3 billion a year, with the higher payments to continue for decades, according to the Associated Press.

Hopes that the state will step in and help local school districts fund the deficit are dimming as law makers face another looming budget deficit for the upcoming fiscal year.

“We’re looking ahead like everyone else,” said Carole Kakabar, superintendent of the Ferndale Area School District.

The Ferndale board will meet Wednesday and is expected to increase taxes by 2.83 mills.

It is the big unknowns including state subsidy and other areas that concerns Barbara Parkins, superintendent of the Greater Johnstown School District.

“The pension crisis – we just don’t know what’s going to happen there,” Parkins said. 

The region’s largest school district is facing a $950,000 revenue shortfall to cover expenses and a balanced budget will happen only after the difference is taken from a rapidly dwindling reserve fund, she said.

“We still have some money in there,” Parkins said. “ This will be year 13 or 14 we’ve had no tax increase.”

Johnstown has eliminated one position through attrition.

Forest Hills likewise is getting by without a tax hike, marking the 16th year of millage status quo, said Superintendent Don Bailey.

At the other end of the county, things are not good in the Northern Cambria School District, said Superintendent Tom Estep.

“We are doing some staff reductions through attrition,” he said of the two vacant positions that will not be filled.

A deficit of a half-m illion dollars likely will force the district to pull that amount from its

$1.5 million reserve fund when the budget gets final approval Tuesday, Estep said.

“We have reserve accounts which at some point we could drain. There isn’t going to be any magic appear,” he said.

A reserve account, created during the past decade, is allowing the Central Cambria School District to build a $7 million middle school without increasing taxes, said Superintendent Vincent DiLeo.

A portion of funding for the building will come from a bond issue.

But at least a small part of the reserve will be used to make up a deficit which started out at $310,000, he said.

“We trimmed the budget, we cut back,” DiLeo said of steps reducing the deficit to $100,000.

Just up the road in the Cambria Heights School District at Patton, Superintendent Michael Strasser said the 2 mills taxes are going up there will be needed to preapare taxpayers for what lies ahead.

“It’s something we don’t want to do, but we’re doing it a little bit at a time,” he said.

Windber Area School District Superintendent Rick Huffman wishes word would come soon from the state on school subsidy, but he has little hope it will be before Wednesday’s scheduled budget adoption when millage is set to go up just over a half-mill.

“We’re trying to work with what we have, but we’re looking at health care, retirement and deregulation of the energy industry,” he said.

The Westmont Hilltop School District is looking at a 2.9 mill hike with adoption set fo r June 21.

“We were hoping the state would come through,” said Superintendent Susan Anderson.

A staff cut of six people made through attrition last year has helped the Richland School District’s financial picture for the upcoming year, said Business Manager Donald Irwin.

A 1.4 mill tax increase is proposed as the district heads into the financial unknowns in the next few years, he said.

A $21.9 million budget calling for a 1.97 mill increase was approved by the Penn Cambria school board in May, a hike needed to cover costs of health care and retirement, said Superintendent Mary Beth Whited.

“We’re trying to hold the line everywhere else because we know we have these increases,” she said.

Four retiring teachers being replaced at lower salaries is helping the Portage Area School District get by without increasing taxes, said Business Manager Mike Kunko.

The Somerset Area School District is in the advantageous position of already having the looming pension cost increase funded, said Business Manager Richard Whipkey.

“The millage is in place. We believe we’re the only district in the state that has done this,” Whipkey said.

The board will meet on June 29 to adopt the $34.5 million budget with a 1.31 mill increase, money needed to cover other increased costs, he said.