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Penn-Trafford raises taxes by 2 mills

| Friday, June 20, 2014, 12:15 p.m.

A dwindling reserve fund and escalating pension costs contributed to the Penn-Trafford School Board's decision last week to raise the millage for most district property owners by 2.7 percent next year.

With fears that the district's reserves could fall as low as $750,000 in 2014-15 — not including the roughly $2.7 million designated for future pension costs — the board voted 7-1 on June 19 to hike the tax rate by 2 mills to 76.85 mills for properties in Westmoreland County.

By percentage, the increase is even higher — 13.4 percent — for the 54 Trafford properties that are in Allegheny County because their tax rate is going up 1.93 mills to 16.36 mills.

Board members pledged to put half of the new revenue toward operations in the $49.7-million budget next year, with the other portion reserved for pensions.

“We've cut pretty much to the bone,” board member Rich Niemiec said. “There's very little to pick off any more.”

Administrators had crunched the numbers on a possible 1-mill tax increase for Westmoreland, but board members said it was necessary to stick with the 2-mill raise proposed in May to help the district fund its state-mandated portion of employee pensions.

For the 2014-15 school year, the district's contribution share will rise from 16.9 to 21.4 percent of the salary of each employee covered by the Public School Employees' Retirement System. Officials have said that will amount to an increase of about $400,000.

“This is a bill that we have to pay whether we like it or not,” board member Phil Kochasic said.

And the contribution rate is projected to keep escalating to offset a pension that is underfunded by about $38.6 billion statewide.

Business manager Brett Lago estimated the school board might have to consider raising the tax rate by another 7 mills over the next five years just to keep up with the pension obligations.

Penn-Trafford has done a good job of preparing for the coming increases but can't put off setting more aside, board member Bruce Newell said. The contribution rate is scheduled to average 31.4 percent from 2016-17 through 2023-24.

“I don't like it, and I have a hard time, personally, dealing with it,” Newell said of voting for a 2-mill increase. “I don't see a better way.”

The only board member who voted against the tax rate was Scott Koscho, who said he preferred a 1-mill increase dedicated solely to the district's reserve fund for pensions. Board members Dallas Leonard was absent from the vote.

Koscho said he thought there was an opportunity for the board to find other savings in the budget. The millage increase is too large for some taxpayers, he said.

The owner of a home in Westmoreland County with the district's median assessed value of $27,880 will pay another $56 in taxes. In Allegheny County, where the median assessed value of a home in the district is is $76,500, the owner of that home would pay another $148.

“For some it might not be a big issue, but for others it (is),” Koscho said.

Chris Foreman is a staff writer for Trib Total Media. Reach him at 412-871-2363 or cforeman@tribweb.com.

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