Franklin Regional likely to request tax leeway
By Daveen Rae Kurutz
Published: Wednesday, Jan. 9, 2013, 8:56 p.m.
Franklin Regional administrators want as much flexibility as possible when planning the 2013-14 budget — but that doesn't mean they'll use it.
On Monday, Director of Financial Services Jon Perry recommended the district apply for referendum exceptions, a process that would enable the district to raise taxes more than the limit set by the state.
“This would give us the flexibility to have a full range of a potential tax increase,” Perry said. “Right now, we're just lacking a significant amount of information.”
Perry forecasts a $1.92 million deficit in his initial $50.1 million budget proposal. However, Franklin Regional officials won't have a good estimate about how much state funding the district will receive until Gov. Tom Corbett releases his budget proposal in Feburary. Officials also won't know how many staff members are retiring until next month.
State regulations allow Franklin Regional to raise the tax rate by 1.75 mills in 2013; however, applying for exceptions would enable the school board to levy an additional 1.48 mills.
The district is facing a 41-percent increase in state-mandated retirement contributions.
That increase is responsible for $1.2 million of the district's deficit.
School districts across the state are facing the spike in pension contributions.
Referendum exceptions were introduced by the state in 2006 as part of Act 1, the state law that distributes gambling revenue as property tax relief. That law limits how much a district can raise the tax rate each year, but it also enables officials to apply for an exception to that limit because of costs related to retirement contributions, special education and construction.
If board members agree to the administration's recommendation later this month, it would be the third consecutive year Franklin Regional applied for exceptions.
This is the first year the district is not eligible for special education exceptions.
Property owners in the district pay an 87.68-mill property tax to Franklin Regional. The owner of a home with an assessed value of $35,000 — which is average for the district — pays about $3,069.
The state-allowed tax increase would amount to an additional $61; the proposed exception would add another $52 to the tax bill of homes with a $35,000 assessment.
Although the school board has raised taxes for 10 consecutive years — which is the longest streak of any district in Allegheny or Westmoreland County — it historically has not raised taxes to the approved limit. In each of the two years the district applied for exceptions, officials approved a tax hike lower than the maximum allowed.
Board Vice President Joe Seymour said that the move is a precautionary one.
“If somebody has a better idea, then bring it up,” Seymour said. “We start, we work through it, and we get it done to educate our kids next year.”
Daveen Rae Kurutz is a staff writer for Trib Total Media. She can be reached at 412-856-7400, ext. 8627, or email@example.com.
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