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NK-Arnold OKs proposed tax hike

| Friday, May 24, 2013, 1:56 a.m.

The New Kensington-Arnold School Board on Thursday approved a preliminary 2013-14 budget that would increase real estate taxes by about 4.6 percent.

The $33.6 million spending plan is an increase of about $3.5 million, or more than 10 percent, from the current year's projected $30.1 million in expenses.

Business Manager Jeff McVey said some of the larger cost increases include salaries, benefits and debt payments.

McVey said the district was fortunate to refinance bonds in recent years that temporarily reduced annual debt payments, but the payments return to $2.9 million next year — about a $1 million jump.

The district also is predicting a $1 million increase in benefits, largely fueled by rising contributions to the employee pension system.

Because of the pension burden, the district was granted exceptions by the Pennsylvania Department of Education that permit the board to increase taxes above an inflation-based cap.

Otherwise, the board would not have been allowed to raise taxes by more than 2.5 percent without a voter referendum.

The preliminary budget calls for the full tax increase allowed by the state, 3.4325 mills. That would increase the property tax rate to 78.1325 mills next year.

Even with the additional tax levy, McVey said the district still would have about a $2.5 million deficit next year that would be drawn from reserve funds.

The fund balance is expected to be about $2.9 million at the end of this school year. It is projected to drop to a mere $370,000 by the end of the 2013-14 year, McVey said.

“We've been eroding the fund balance for quite a few years,” McVey agreed.

Part of the problem is that the tax base in Arnold and New Kensington is decreasing in value, rather than slowly growing as it is in many neighboring school districts, officials said.

One mill in New Kensington-Arnold generates about $130,000.

Although the district on paper will receive an additional $1.2 million from the state next year, McVey said that is directly tied to rising Social Security, transportation and debt costs. He estimated the basic-education subsidy will climb only by about $150,000.

And federal funds are projected to decrease by about $50,000 due to the sequester and changes in the Title I program that funds reading specialists and other interventions, McVey said.

The board approved the preliminary budget in an 8-1 vote with Pat Petit objecting. A final budget is scheduled to be passed on June 27.

Half-day kindergarten opposed

Petit said after the meeting he voted against the budget because he has had second thoughts about reducing kindergarten from a full-day program to half-day next school year.

Although he was one of five board members who approved the move last month, he said many residents have complained and approached him at the polls on Tuesday. He is one of three board members who are facing re-election as their terms expire this year.

Two residents — Raymone Thomas and Crystal Haus — spoke in opposition to the kindergarten change at Thursday's meeting.

Thomas, who has a child scheduled to start kindergarten in the fall, said she will consider a private school with full-day kindergarten if the district doesn't offer it.

“I was heartbroken to hear you went with half-day instead of full-day,” she said.

She questioned whether money the board spent on a recent purchase of a new phone system and past spending on Valley Memorial Stadium could have paid for full-day kindergarten.

Board President Bob Pallone said both of those projects were funded through bonds that had to be spent on capital facilities projects, not on daily operations or education.

He also said that although the half-day program may save $120,000 compared to current-year expenses, he projected it would save approximately $250,000 next year because the district was able to reallocate kindergarten teachers and classrooms for other grades where they are needed.

Haus said she feared the district's students would continue to fall behind those in neighboring school districts and exacerbate the problem of declining property values if families choose the leave the district.

Superintendent John Pallone noted the change will result in very low class sizes that could boost performance. He said a full-day option will still be an option for students whom the district deems in need of extra attention.

“This isn't a decision that was made lightly,” Pallone said. “We would do it (offer full-day kindergarten) if we could. But we have to operate within our financial limits.”

“I think it's just a loss for our future,” Haus said.

“I agree,” Bob Pallone said.

Liz Hayes is a staff writer for Trib Total Media. She can be reached at 724-226-4680

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