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5 districts approved for extra tax money

| Sunday, May 12, 2013, 12:33 a.m.

State education officials granted five Alle-Kiski Valley school districts permission to raise property taxes higher than their inflation rates for next school year.

Armstrong, Franklin Regional, Freeport Area, New Kensington-Arnold and Riverview school districts were approved for higher tax increases for the 2013-14 school year because of rising pension obligations, special-education costs or both.

Act 1 of 2006 requires districts to keep tax hikes within an inflation-based cap determined by the state. In exchange, district residents get a cut of state gambling revenue in the form of reduced tax bills.

Locally, tax-increase caps ranged from 1.7 percent for Allegheny Valley and Fox Chapel Area school districts to 2.5 percent for Apollo-Ridge, Highlands and New Kensington-Arnold.

However, districts can request permission from the state Department of Education to raise taxes above the cap if they can demonstrate a hardship due to increasing costs for special education, contributions to employee pension funds or pre-existing debt for school construction.

If the state does not grant the exceptions, districts have the option of seeking voter approval through a ballot referendum. Otherwise, districts must trim their budgets to fit within the cap.

“The law is a balancing act between residents' ability to pay taxes versus what schools need to continue operating,” said Tim Eller, spokesman for the Education Department. “It's there to keep school boards from increasing spending at alarming rates without giving voters a say or having it subject to checks and balances.”

Statewide, about half of the 171 districts asking for exceptions were granted the full amount requested.

All five Alle-Kiski Valley districts that requested exceptions received permission to exceed the inflation cap.

But only Riverview was granted the full amount — 0.3811 mills, or about $200,000 in revenue.

Riverview Business Manager Frank Thompson said he expects at least some of the additional levy will be used to balance the budget.

He said the current total millage rate is proposed at 21.239 mills, but he said that could change before the final budget is passed next month.

Although the proposed millage figure is lower than the current year's rate, taxpayers would see a tax increase because of Allegheny County's property reassessment.

New Kensington-Arnold Business Manager Jeff McVey said officials there will be able to work with the extra 1.7035 mills, or about $200,000, granted for pension costs. The district had requested an additional 2.6325 mills, or about $316,000.

With the exceptions, New Kensington-Arnold is proposing a total tax increase of about 3.5 mills, or about 4.7 percent.

“As the funding becomes clearer, it may allow us to adjust some decisions that were made,” board President Bob Pallone said. “It's very difficult. The governor's continued assault on public education is really making it difficult on property owners.”

Pallone said this is the first year the district has requested exceptions.

Freeport Area has requested exceptions in the past, but this the first time they may be used, Business Manager Bill Reilly said.

The school board last week approved a preliminary budget that would increase Armstrong County taxes by a total of 3.4 mills, or 6.5 percent, and Butler County taxes by 5.9 mills, or about 5 percent.

Reilly said the exceptions would provide an additional $300,000 for special-education and pension costs — all but about $50,000 of the extra revenue requested.

Armstrong School District has the biggest gap between what was requested in exceptions and what was granted: Only about $600,000 was granted of the $2.2 million requested.

Superintendent Stan Chapp and Business Manager John Zenone did not respond to requests for comment.

Franklin Regional was granted most of its requested exceptions for pension costs, but likely won't use them. The district is permitted to levy an additional 1.4853 mills in taxes for about $500,000.

“We had to make that decision on whether or not to apply for the exception,” said Jon Perry, the district's business manager. “We have no intention of utilizing it.”

During the 2012-13 school year, districts statewide spend only about 30 percent of approved exceptions, or $48 million of $160 million.

Liz Hayes is a staff writer for Trib Total Media. She can be reached at 724-226-4680 or lhayes@tribweb.com. Trib writers Amanda Dolasinski and Tony LaRussa contributed to this report.

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