State College

State College Area school board pares back planned tax increase

The State College Area school board on Monday night approved an amendment to the 2015-16 preliminary budget that would lower the proposed tax on residents from the original motion.

It calls for a 5.7 percent increase — down from the 6.1 percent increase that was passed Feb. 9, said district business administrator Randy Brown, who attributed the decrease to a bond sale made last week “that came in better than estimated.”

“It’s right in line to what we are looking for,” Brown said.

The average district taxpayer can expect to pay $2,994 during the 2015-16 fiscal school year — about a $160 increase from the current year, Brown said.

The board also approved a motion for the district to apply to the state for an exception to the Act 1 index real estate tax rate.

This will allow the Act 1 tax index to increase from a maximum amount of 1.9 percent, which will be used to fund the referendum debt tied to the State High project, Brown said.

The Act 1 index is used to determine the maximum tax increases for each tax the school district levies.

Brown said that, by state law, the district must reach its Act 1 index maximum before applying for the exception.

“This is a step we’re going through because the referendum election that was passed last year that residents said they would agree to pay for the high school project improvements over and above the normal tax increase,” Brown said. “We expect that in the spring — May-June time frame when the actual budget is finalized — these numbers will be fairly accurate and fairly close to that final budget because of the budget work we’ve already done.”

The district must apply for the Act 1 index exception by March 5, according to a report from district spokesman Chris Rosenblum.

As approved by the board at an earlier meeting this month, the debt service for the 2015-16 fiscal year will be for interest only, and start next year through the end of a 25-year debt repayment plan, Rosenblum said.

The total cost of the State High renovation is $115 million. In addition to $85 million in referendum debt, the district will use $10 million in capital reserve funds and $20 million in non-referendum borrowing.