State College Area School District working on high school project costs

mmorgan@centredaily.comNovember 25, 2013 

— Though much is still unknown, State College Area School District officials continue to work to refine examples on how the high school project could be funded.

Assistant Business Administrator Donna Watson provided an update at the school board meeting Monday on the work that staff has been completing to get as much information out as possible.

The district is still looking at a referendum debt range of $75 million to $85 million for a total project cost of about $115 million. At the lower range, officials are using an example of about a three-quarter mill district allocation, and at the higher level the district would contribute about a half a mill per year, Watson said.

Residents could expect an estimated increase related to the referendum tax between 6.33 percent and 7.17 percent based on the current assessed value, but the numbers could be 5.77 percent to 6.52 percent based on the projected assessed value in 2016-2017. An increase in assessed value decreases the referendum tax per taxpayer, and the district is assuming a 1.5 percent increase in assessed value each year.

“As we add more properties to the tax roll, there are more properties to contribute,” Watson said.

The numbers also assume a $10 million up-front district contribution.

Watson said the difference between the $75 million and $85 million in annual tax dollars would be about $22 in 2016-2017 and about $20 per year for the average homeowner until the bonds are fully paid. The district is anticipating a 30-year bond repayment.

Total, average residents should expect to pay a total tax increase ranging from $72 to $191 over three years of borrowing and between $46 and $105 after the debt service is in place through 2023, Watson said.

The referendum increase would be phased in over the three years of borrowing; it wouldn’t be added all in one year, she said.

The base tax increase, which is determined by the inflation-based Act 1 index, is a separate line item from the referendum increase on the tax bill.

Officials looked at between a 1.7 percent to 3.02 percent base tax increase based on the Act 1 index the past two years and the historical average for the past 10 years.

Included in the base tax increase would be the funding to address rising costs in the Public School Employees’ Retirement System, board President Penni Fishbaine said.

She added that it is also a plan for other facilities in the district and will address other elementary and middle schools, not just the high school.

Board member Jim Pawelczyk said the additional breakdowns should allow people to understand the cost component more clearly.

But he said he is still not OK with the range of referendum cost.

Pawelczyk has said that he wants to be risk averse when it comes to choosing a referendum amount and he wouldn’t want to go more than $75 million.

“The part that I’m not comfortable with is the referendum amounts we’re looking at here,” he said. “One of those numbers I can support, one I cannot.”

The board is expected to set a maximum referendum amount at its Dec. 16 meeting.

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