Norwin School District caps any property tax that could come next school year
Any real estate tax hike that the Norwin School District implements for the 2018-2019 school year will be capped at a maximum of 3.1 percent as a result of the school board on Monday setting that limit on any tax increase.
The maximum tax hike that the school board unanimously agreed to for next school year is based on the inflation-based index determined by the state Department of Education.
Norwin had raised property taxes for the current school year by 3.3 percent to balance the $68.6 million budget. Norwin raised property taxes by 2.4 mills to 77.6 mills.
School officials said the additional revenue from the tax hike was needed to prevent cuts in the education program and teacher layoffs.
While the state Education Department can grant school districts exceptions to increasing taxes above the inflation index to pay for specific costs, the district's auditor, Mark Turnley of New Brighton, told the board that Norwin can't raise the real estate tax above the inflationary index simply to replenish the district's fund balance.
Norwin's fund balance at the end of the 2016-2017 school year was at 5 percent of its total budget. While that's at the low range of the recommended 5 percent to 8 percent of the budget for an unassigned fund balance, Turnley said it's not low enough for the state to permit a tax hike to replenish it.
If the fund balance were above 8 percent, the state would expect the school district to tap into it to avoid a tax hike above the inflationary index, School Director Robert Perkins said.
For Norwin to have what is considered a “prudent fund balance” to cover two months of expenditures, that fund balance would have to be $11.4 million, Turnley said.
The school board has until June 30 to pass a budget. The board typically does not introduce a tentative budget until May.
Joe Napsha is a Tribune-Review staff writer. Reach him at 724-836-5252 or email@example.com.