Fox Chapel Area School Board approves 2025-26 budget with 2.3% tax increase

Fox Chapel Area School District officials have approved next school year’s budget with a 2.3% tax hike and no cuts to programs or services.

The board voted unanimously on its 2025-26 spending plan on June 9.

The millage rate jumps from 21.51 mills to 22 mills, about a 0.5-mill increase.

The proposed tax rate is expected to generate about $1.7 million in revenue.

It is less than the 4% hike allowed by the Act 1 index, a state formula based on the inflation rate that limits property tax hikes without requiring voters’ approval.

One mill generates about $3.7 million in revenue.

The tax increase for property owners equates to about $50 more in real estate taxes per $100,000 assessed value.

Some property owners who qualify for the homestead/farmstead exclusion could see their tax bills decrease by about $326, according to district reports.

Run the numbers

Projected revenue was listed at about $120.7 million and expenses at $123.1 million. The estimated $2.4 million shortfall will be covered by reserve funds.

Income includes about $94.5 million from local sources, $25.1 million from state sources and $1.03 million from federal sources.

Spending includes about $72.8 million for instruction, including regular and special education programs; $35.7 million for support services, $3.33 million for student activities and community services, $1.96 million for facilities acquisition, construction and improvement services; and $9.31 million for other expenditures such as debt service and interfund transfers.

The district will still have more than $12 million in reserves after covering the budget shortfall.

Facility upgrades in the budget include water/sewer line repairs, HVAC upgrades, building safety upgrades and increased insurance premiums.

The district projects a 5.7% increase in medical coverage premiums, 3% hike for dental coverage and a 3% increase for vision coverage.

District documents also show assessment values decreased due to Allegheny County assessment appeals, resulting in a projected $250,000 real estate revenue decrease.

Public School Employees’ Retirement System employer contribution rate next school year is about 34%.

Pension payments make up about 14% of the overall budget. The state reimburses the district for half of the costs.

Lots of work

Eric Hamilton, board member and treasurer, said a lot of work went into crafting the budget, from multiple committee meetings to full board discussions and countless administrative hours.

“It’s a process that starts at the very beginning of the school year,” Hamilton said. “We meet in a projects and planning committee to talk about capital needs and long-term planning for the school district. We also meet with the superintendent’s resource planning committee. That group is a group of community members and board members who discuss and review expenditures and revenues very carefully in great detail with the superintendent. They meet several times to review plans for the budget. We’ve been meeting multiple times.”

Hamilton said the resource planning committee also includes financial experts. Financial planning also revs up in the spring as the district moves toward its preliminary budget and formal presentations.

District Business Manager Kimberly Pawlishak in April said everything was on the table from tax increases to program cuts, increased class sizes and more to help balance the budget.

She also cautioned in that month’s presentation that there were a lot of unknowns, such as updated financial figures from the state, property tax reduction allocations, additional grant opportunities and federal funding.

More information came in as the weeks went on, including an early May update from the state Department of Education about the district’s share of gaming funds.

Fox Chapel Area is expected to receive about $2.55 million; distribution of the funds will be via the homestead exclusion.

Pawlishak was not at the June meeting.

Superintendent Mary Catherine Reljac, after the budget vot,e said it was extremely important for the district to maintain all student options.

She also thanked everyone who was involved in the process.

“As a school district, we value our programming and the services that we provide to students,” Reljac said. “We also recognize the responsibility we have for our school community. That is something that all of our board members keep in mind and our administrative team keeps in mind and those who manage our budgets keep in mind. The process of developing a budget takes multiple months. It’s iterative, meaning it is edited and revised and considered through lots of different lenses to reach the final conclusion that we reached.”

Full board support

The district raised taxes 3.75% as part of the 2024-25 school year’s budget.

That budget vote was 6-3 in May 2024. School directors Vanessa Lynch, Amy Cooper and Ariel Zych dissented.

This time, everyone was in agreement that taxes needed to be raised in order to help address increasing costs and revenue losses.

“I think all of the board members recognize the circumstances that we faced this year,” Hamilton said. “Especially with property tax issues in the county and the extra challenge that that presented. It’s the first time in a decade that we’ve had a reduction in our property tax revenue rather than what we usually have, a small increase in that revenue from new home sales. With the common level ratio being reduced, we’re the first time seeing an actual reduction in our revenue. … We want to maintain the quality of the district’s services. We pay very close attention to all of our contracts.”

Board member Ariel Zych stressed the need for Allegheny County to enact property tax assessment reform.

“Our county is failing our schools and is failing our municipalities,” Zych said. “That has to happen. We’ve done everything we can to respond to a property tax assessment system that is broken and we are in good shape. Not all districts are fairing that well.”

More information about the district’s finances can be found through its website, fcasd.edu/about-us/budget.