Fox Chapel Area School District property owners should expect to pay more in real estate taxes next school year.

District officials have proposed a 1.5% tax hike in the 2023-24 budget. If approved, the millage rate would rise to 20.7352 mills, which equates to a $31 increase in property taxes per $100,000 value.

The tax hike is expected to generate $1,043,949 in additional income.

It would be the district’s third tax hike in three years if approved.

The proposed budget is expected to be approved May 8. Its formal adoption is scheduled for June 12.

There are no program cuts in the budget.

Business manager Kim Pawlishak gave a budget presentation May 1 at a school board workshop meeting.

Estimated revenues for the district were listed at $114,667,359 and expenses at $115,373,219,with a shortfall of $705,860.

Pawlishak said the gap, which includes added income from the tax hike, would be filled with $705,860 from its combined financial reserve of $26.5 million. The school district has reserve funds that it designates as unassigned, assigned, committed and nonspendable.

The district could have raised taxes a maximum of 4.1% under the Act 1 index, a state formula which limits school district real estate tax hikes.

“We regularly try to balance the budget through a combination of using fund balances and, where necessary, tax increases,” said Eric Hamilton, board member and treasurer. “As long as we have a fund balance, we try not to burden the taxpayer with the full increased costs the district faces.”

Hamilton said the board is staying within Pennsylvania School Boards Association recommendations regarding fund balances.

Pawlishak explained that capital improvements, pension obligations and increased healthcare costs were among the driving factors for the tax increase and reserve draw.

She said medical premiums were projected to increase 14% with vision and dental to each increase by 3%.

Proposed capital improvements include boiler demolition and upgrades, plus heating, ventilation and air conditioning improvements at the high school; boiler room upgrades and direct digital controls and inspection at Dorseyville Middle School and O’Hara Elementary School; air handling unit and rooftop unit replacements and electrical wire upgrades at Fairview Elementary School and HVAC replacement at Hartwood Elementary School.

The district projects a 2% increase in state basic education subsidies and expects $2.4 million in earnings on investments, Pawlishak said. These factors were considered when calculating the tax increase.

The proposed budget also includes the use of $622,324 in covid relief funds.

Pawlishak said not having a tax increase would result in a larger budget deficit, require a bigger draw from district reserves and may set up a steeper hike in taxes in subsequent years.

“I understand the need to raise the taxes in order to meet all the various (expenses),” board member Katie Findley said. “To constantly see the taxes go up each year, I hesitate with that. I understand that if we don’t do it, a 3% or 4% hike the next year (may happen). At some point though, we do have to realise that we can only keep going so high each year without there still being fallout. People will still feel the pinch.”

Hamilton said the administration and school board constantly work on minimizing costs and maximizing every dollar.

“We have a number of meetings throughout the year to establish the goals for the budget, and also make sure we’re involving the administrators and community though our resource planning group,” he said. “That group includes community members. We have a policy and planning committee. All those groups meet to review the budget and forecasts and set goals for the district.”

The district raised taxes 1.5% as part of this school year’s budget.

It had raised taxes for the 2021-22 school year by 1.3%, setting the millage rate at 20.1269 mills, according to the Allegheny County Treasurer’s Office.

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