Penns Valley

Penns Valley Area school board OKs preliminary budget, tax increase

Penns Valley school board unanimously approved a preliminary budget Monday that would raise property taxes for area residents.

District business manager Jeffrey Wall said, under the district’s preliminary budget, property taxes would increase approximately .91 mills, or 2.1 percent, to 44.14 mills.

For residents with a home assessed at the median level, around $42,000, a 1-mill tax increase would mean paying an extra $42 per year, Wall said. An increase of 1 mill would generate approximately $250,000 for the district.

The 2013-14 preliminary budget is pegged at $23,967,688, which is an increase of $826,029, or 3.57 percent, over the 2012-13 budget of $23,141,659.

In addition to the proposed tax increase, Penns Valley is expected to receive an additional $153,000 this year due to a bump in assessed value of property in the district. Wall said assessed value increased $3.7 million, a 1.4 percent increase.

“Over the last three years, we experienced below 1 percent growth,” Wall said. “So we were not getting much new income from growth in our base. We are seeing some resurgence in our growth.”

Between the proposed millage increase, and the increase in the district’s assessed value, Penns Valley will receive approximately $353,000 in additional real estate tax revenue.

The preliminary budget includes revenues of $23,670,944, meaning the district must still find additional funds or lower expenditures to balance the final budget later this year.

Superintendent Brian Griffith said the preliminary budget approved by the board plans for a “worst-case scenario” regarding state and federal funding. Gov. Tom Corbett, in his proposed state budget, called for slight increases to education funding.

Corbett’s spending plan must still pass through the state legislature, and is subject to change, however, and the district is budgeting as if it would be receiving 2012-13 levels of funding.

“We will closely monitor emerging federal and state budgetary trends,” officials wrote in the district’s preliminary budget proposal.

The board could also consider raising property taxes by an additional .96 mills in the final budget, which would generate approximately $235,000. But the preliminary budget did not include that tax increase, Wall said.

Increases in salaries, retirement contributions and medical insurance costs are the largest drivers of the budget increase, according to Wall.

The district faces an increase in salaries of $250,000, or 2.66 percent, in retirement contributions of $430,000, or 38 percent, and in medical insurance costs of $398,000, or 22 percent.

The medical insurance costs include an estimated $250,000 payment to the district’s health care consortium to reduce an underfunded premium account. Wall explained the district has spent more on “payments out for our employees than we have put in in premiums” in the past three years and now must catch up.

“Without the extraordinary increases in mandated retirement contributions and health insurance costs, the 2013-14 budget would not require a real estate tax increase,” district official wrote in the preliminary budget proposal.

Wall said district administrators will continue going over the budget and trying to find additional savings until the final version must be passed by the board later this year.