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Armstrong School Board cuts tax 2 mills by drawing on fund balance

| Tuesday, June 28, 2011

MANOR — Armstrong School District taxpayers will see a slight decrease in their tax bills next year, thanks to a move by outgoing directors to give back $1.1 million from the projected fund balance.

During a discussion of the district's 2011-12 budget on Monday, board President Rose Stitt said that based on the amount of leftover money in the budget for next July, as well as the possibility of an increase in state subsidy, the current millage rate of 55 mills in Armstrong County should be cut by two mills, or about $1.1 million. One mill generates about $550,000 in revenue.

Business manager Eric Brandenburg, who recalculated the budget totals after the vote to reduce the millage rate, said the district will have revenues of $84,221,205, while expenses will remain at $85,343,758. The difference will be covered by part of the balance in this year's budget. The district expects to have an estimated $5.1 million fund balance in June 2012.

Brandenburg explained that the median assessed value of properties in Armstrong County is $25,992. With a tax rate of 55 mills, the average bill would have been $1,430, but with the reduction, the average bill will decrease by $52 to $1,378. A similar reduction will occur in Indiana County.

Also included in the budget was an additional $500,000 placed in budgetary reserve and an increase of $175,179 to restore the district's four full-time athletic trainers to their positions. They had been furloughed by the district last month.

The district will restore 16 teachers to their positions, thanks to an increase in the number of retirements announced this year. The teachers union approved a retirement incentive package in the hope of preventing the furloughs of 35 teachers.

Stitt, who proposed the tax cut, said she did so because "As a taxpayer, I don't think we need to have over $6 million in fund balance."

"Everyone, including Sen. Don White and Rep. Jeff Pyle, have been saying the taxes are too high, so maybe if we lower the taxes, we can start to bring jobs and people back to the district," she said.

Minority directors Jim Rearic and Chris Choncek argued with Stitt, saying the timing of the tax reduction was suspect.

"We are a struggling district, and this is going to make it worse," Rearic said. "We were in an almost identical position a couple years ago and you (Stitt) wanted no part of giving money back to the taxpayers."

Rearic said financial planners advised the district to "make slight increases in millage over the years, so that when money is tight, there is a little bit of a cushion. By cutting the millage rate now, the next board could be faced with taking extreme measures if we find ourselves in a less than favorable financial situation."

Choncek said he thought that giving money back to the taxpayers a month after the district voted to furlough 66 employees was a "bad business decision."

"We kept hearing that we were in big trouble financially, that we had to furlough all those people, and now we are hearing it's not so bad that we can afford to give money back," he said. "It's not fiscally prudent to do at this time. I wasn't in favor of it the last time it was brought up, and I continue my position."

Director Joe Close said he thought that the extra money would be better used if it were left in the budget and placed in educational programs.

"I would like to give it back, but at this time, I think it would be best to use it where it is most needed," he said. "We need to put the money into the education of our kids."

Directors voted 5-4 to amend the budget to include the millage rate reduction. Directors Rearic, Choncek, Close and Steve Kozuch voted against the change.

The final budget was approved by the board in a 5-4 vote, with the same directors casting the no votes.

Renovation projects and voting regions

While not on the agenda given to the public before the meeting, directors voted on a resolution directing the district solicitor to take the steps necessary to direct the state Department of Education to make a ruling on three renovation projects submitted by the board over the past two years.

Stitt said the resolution was needed so that the district can better determine the fate of $80 million the district borrowed to complete renovation and expansion projects at Elderton High School and Elementary, Ford City High School and Kittanning High School.

The measure was passed by a 5-4 vote with directors Choncek, Close, Rearic and Kozuch casting no votes.

The board also adopted a resolution directing the solicitor to seek court approval to change voting regions to an at-large election for all nine directors for the next municipal election in 2013.

"We learned that it needed to be changed after the census numbers were released, so I am asking for the district to make it as fair as possible," Stitt said. "One person, one vote is the most fair way to do it."

Rearic, who supported the measure while questioning Stitt's proposal, said the new board could change the voting regions if it so chooses.

"I think it's a good idea, but there are several ways it can be done to make it fair," he said. "We brought up the idea last year and it was refused, so I wonder why you want to change it now."

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