Fox Chapel Area School Board passes proposed 2024-25 budget with 3.75% tax hike

Fox Chapel Area School District property owners should expect to pay 3.75% more in real estate taxes next school year.

Board members voted 6-3 at their meeting May 6 to pass the district’s proposed $119.5 million budget for 2024-25, using a tax hike and money from the district’s fund balance to balance it.

School directors Vanessa Lynch, Amy Cooper and Ariel Zych dissented.

The budget would set the millage rate at 21.5128 mills, which would be a 0.7776-mill jump, if passed in its current form.

It means property tax payments would go up $77.76 per $100,000 in assessed value.

The tax hike is expected to generate about $2.7 million for the district.

The district could have raised taxes 5.3% capped by the Act 1 index — a state formula based on the inflation rate that limits property tax hikes without requiring voters’ approval.

Projected revenues were listed at about $119 million with expenses projected at just under $200,000 more. Some of the shortfall will be covered by pulling from the district’s $6.9 million fund balance.

Expected income includes about $74.8 million in current real estate taxes, $12 million in Act 511 taxes including earned income taxes, $5.6 million in basic instructional and operating subsidies, $2.3 million in delinquent taxes and nearly $1 million in federal revenue.

Expected spending includes $84.9 million in wages and benefits, $16.1 million in mandated/contracted expenses, $5.3 million in debt service and $2.2 million for construction/maintenance.

Why the tax hike?

The vote was taken after a lengthy discussion and presentation of updated budgetary figures by Kimberly Pawlishak, the district’s business manager.

She said the tax hike was necessary because of rising health care costs, inflation, maintenance projects in the multiphase capital projects plan and to recoup an estimated $800,000 revenue losses due to assessment value changes.

Those value changes also mean an $800,000 refund of real estate taxes this school year, according to the presentation.

“There will be changes between the proposed final and the final budget,” Pawlishak said.

Medical premiums were projected to increase by 9%, dental coverage by 5% and vision by 3%.

Capital projects planned

Capital projects include upgrades at every school except Kerr Elementary.

Specific ones mentioned at the May meeting include boilers and flooring work at O’Hara Elementary, HVAC improvements and electrical upgrades to the 75-year system at Fairview Elementary, flooring work at Hartwood Elementary, boilers at Dorseyville Middle School and water and sewer repairs at the high school.

The proposed budget includes a $1.5 million transfer from the capital reserve fund to help cover those costs, as well as using the rest of the district’s remaining $232,000 in federal Elementary and Secondary School Emergency Relief funds.

Board members who opposed the budget wanted to see cuts to capital projects, with Lynch recommending more sustainable and green efforts.

They also indicated a 3.5% tax hike would be more acceptable. That would result in an estimated $200,000 revenue loss compared to what was presented.

“I would like to see it go lower,” said Cooper of the proposed tax increase. “I think it’s just a really hard ask on our community. I’ve voted for the budget every year, but this is a really big jump.”

Superintendent Mary Catherine Reljac said her team will take a close look at where cuts can be made. She noted all of the “nice to have” projects already were removed from the proposed budget.

School Director Adam Goode said the proposed 3.75% tax hike gives the district the most flexibility to maintain programs and staffing while addressing aging infrastructure without borrowing money.

“I think this is an intricate budget,” Goode said. “There’s not a lot of slack.”

Board treasurer Eric Hamilton agreed and believes the spending plan has been thoroughly vetted.

Board Vice President Ronald Frank cautioned that cuts to capital projects may be detrimental and was against drawing more money from reserves.

“We are moving into territory that we’re guessing,” he said. “I don’t think that’s appropriate. We’re guessing and we’re praying that repairs won’t be necessary.”

A final budget must be adopted by the end of June. The next voting session is scheduled for 7 p.m. June 10 at O’Hara Elementary School.

The May meeting was more than three and a half hours, including a little more than an hour of student recognitions for arts, music and academic achievements as well as commendations of about a dozen employees marking 25 years with the district.

A video of the meeting can be viewed on the district’s YouTube page. The budget presentation starts at just before the 1:17-minute mark.

The district approved this school year’s budget with a 1.5% tax hike and no cuts to programs or staffing.