Penn Hills School Board OKs advertising proposed 2021-22 budget with near 8% tax hike

The Penn Hills School Board has approved advertising a preliminary budget for next school year that includes a property tax hike of nearly 8%.

The proposed 2021-22 spending plan approved Jan. 27 was one of three the school board considered. It was the one recommended by the district administration.

However, the plan is opposed by some board members, including board President Erin Vecchio, who said she wouldn’t vote for any increase. She said the district is expecting millions of dollars in federal and state money that this budget does not take into account.

The other options included a budget with no tax increase but an estimated deficit of $3.23 million, and another option with a 4.1% tax hike, which is the state’s limit prior to the district seeking permission to exceed that cap. It also including an estimated $1.45 million deficit.

District officials plan to approve the preliminary budget and submit it to the state Department of Education on Feb. 17 in order to seek tax hike exemptions from the state due to special-education and pension costs.

Business Manager Eileen Navish and several board members stressed that what was voted on in late January will not be the final budget come June.

But passing it meets the Feb. 17 deadline, and allows several months for the administration to make changes “to work these numbers so that the revenue and expenditures are much closer, and a huge tax increase would not be necessary,” Navish said.

Navish said state-appointed chief recovery officer Daniel Matsook, Superintendent Nancy Hines, state-appointed technical advisor Michael Lamb and shereviewed the budget.

The current real estate tax rate is 29.6965 mills. The hike in the recommended advertised budget is 2.2175 mills, for a potential rate of 31.914 mills.

A property owner of a home with an assessed value of $50,000 would pay about $111 more in taxes next school year.

Projected revenues and expenses in the recommended scenario were balanced at about $89.46 million.

“We don’t vote on a budget until June, but we have to go through these procedures,” board member Rob Marra said. “Even if you look at the option where we don’t have any tax increases, we are much closer to a balanced budget than we have ever been in the past four or five years. It says a lot about how much we’ve done (and) how close we’ve come.

Marra noted, “This does not include any additional stimulus money or things that could come down the line that will go in there.”

The presentation highlighted the district’s overall increased property value assessments, a reduction in debt service due to bond refinancing as well as sacrifices made by staffers with pay freezes the past few years.

The district was about $172 million in debt as of 2016 largely due to construction loans for the elementary and high school.

Navish said that was cut to about $161 million as of late June.

Matsook said the district has been trending upward in terms of financial recovery.

The board approved a 3.6% tax hike for this school year despite the troubles families are going through as a result of the covid pandemic.

Vecchio said she will not vote for a tax hike this time no matter what budget is recommended.

“I will not vote for a tax increase during the pandemic,” she said. “Too many people have lost their jobs.”

Vecchio noted the proposed budget does not include an estimated $5.7 million in federal emergency relief funds, nor does it have more than $1 million in state grants state Sen. Jay Costa, D-Forest Hills, is expected to procure for the district.

“I think we’re going to be good,” Vecchio said. “We should have a surplus. (Navish) just gave the worst-case scenario.”

The budget presentation is expected to be posted on the district’s website, phsd.k12.pa.us, in the coming days.