Mt. Lebanon board debates utilizing reserves
The Mt. Lebanon School Board is looking at raising taxes and tapping cash reserves to close an anticipated $2.6 million gap in the 2014-15 budget, officials said on Monday.
Board President Elaine Cappucci asked members at Monday's meeting how they wanted to balance tax increases and spending the district's reserves against reducing spending.
The consensus was that district staff would draw up a proposed budget with a tax increase of 0.55 mills to 0.6 mills. The budget draft would use $750,000 to $1 million of the district's fund balance, and would include a list of possible cuts.
The district's operating budget is estimated at $88.3 million.
“The fund balance is there and available, and it's very enticing,” said board member Larry Lebowitz, who supported using $750,000 of the money, left over from years when the district underspent or collected more than anticipated in taxes. “But we have to be mindful that money is necessary for the proverbial rainy day.”
Finance Director Jan Klein said that if the money isn't used to balance the budget, the fund balance could end up paying for a grievance filed by the teachers' union or it could fill a $600,000 gap in the budget if the state doesn't come through on reimbursements for the high school renovation project.
Klein said she was comfortable spending the $750,000 but worried going beyond that would deplete the reserves more quickly and become a recurring problem if other revenue is found.
The state's Act 1 limits how much districts can increase taxes each year. So if the district has a deficit one year and doesn't raise taxes, its limit the next year will be based on the prior year's tax rate, she said.
The Act 1 limit and its exemptions allow Mt. Lebanon to increase taxes by up to 0.8 mills, which would reduce the deficit to $500,000, but none of the board appeared to favor going that high.
The board has increased taxes six times since 2006, with an average increase of 0.55 mills, or $55 a year in taxes for every $100,000 of a property's assessed value.
The board cut the tax rate by 4.52 mills to 22.61 mills in the current school year, because of the countywide reassessment.
Klein and Superintendent Timothy Steinhauer will take the board's recommendations and work on a proposed budget that includes several options for cuts, tax increases and spending from reserves.
Matthew Santoni is a staff writer for Trib Total Media. He can be reached at 412-380-5625 or firstname.lastname@example.org.