Fox Chapel Area homeowners expect to pay more taxes
Property taxes in the Fox Chapel Area School District are set to be cut by 2.8 mills but it's likely that most homeowners will still pay a higher tax bill next year because of Allegheny County reassessments.
School board members approved a tentative $90,000 million budget, with a tax rate of 18.7 mills, down from 21.5 mills in 2012-13.
The median home price in the district is $202,300, with an expected increase in assessed value of 16 percent to $236,000. If the owner applied for and received a Homestead exclusion, the home value will be about $226,000, making the tax rate in the 2013-14 school year $4,254. That's up from $4,179 in 2013, despite a then-higher tax rate.
Homeowners and commercial property owners had the right to appeal their new assessment values and as of May 13, there were 2,913 properties in the district at some level of appeal, said Bonnie Berzonski, district coordinator of communications.
The total value of the pending appeals is more than $1 billion, Berzonski said.
“For this reason, the figures presented with regard to millage calculations are subject to change in the final budget that will be approved in June depending on the outcomes of those pending appeals,” she said.
The increase in assessments doesn't mean that the district will make more in tax revenue. Instead, board members are required to reduce the millage rate by a percentage that equals the increased value of assessments, minus any new construction.
Berzonski said the net assessed value of taxable properties for 2013 in the district is about $3.2 billion.
It's an increase of 16.8 percent over last year, she said.
The tentative budget calls for about $85 million in expenses, an increase of 4.5 percent, or $3 million over last year.
Some of the highlights include a 1.42 percent increase in salaries, a 7 percent increase in insurance coverage costs and a 4 percent increase in the district's contribution rate paid to the Public School Employees' Retirement System (PSERS), which translates to an extra $2 million in costs. The district paid $5.1 million last year to the fund and this year is expected to pay $7.3 million.
The district anticipates the pension costs will strain future budgets.
“It is estimated that under the current rate structure proposed for funding the state retirement system (PSERS), the district will pay out nearly $120 million over the next 10 years,” Berzonski said. “These unprecedented increases, combined with the reassessment process in Allegheny County and the limitations on increasing tax rates imposed under Act 1, have necessitated the district to prepare for shortfalls in the budget.”
The district has committed fund balance reserves of $10.2 million to cover the anticipated PSERS increases, she said.
“The district will need to use $2.1 million of these funds in 2013-2014 to bridge the gap in funding for PSERS until the tax rates can keep pace and fund these costs,” Berzonski said.
Some of the ways that board members are combating the cost hike is through payroll reductions and new instructional strategies that are more cost-effective.
At the same time, the district is gearing up for major improvements at the high school, middle school and three elementary schools. The district issued bonds during 2013 and currently holds $46 million to pay for the upgrades. The bonds were structured so that no extra debt service expenses would be required to fund these projects.
Residents can discuss the preliminary budget during a special session at 7 p.m. June 6. Board members also will review it on June 3 and 10, before voting on a final budget during its meeting at 7 p.m. June 17.
Tawnya Panizzi is a staff writer for Trib Total Media. She can be reached at 412-782-2121, ext. 2 or at email@example.com.