New Kensington-Arnold School Board proposes tax increase, warns of bleak financial future

New Kensington-Arnold School Board approved a $37.9 million proposed budget Tuesday that includes a 3-mill increase in property taxes.

The board went back and forth before the vote on whether to propose an increase of 2 or 3 mills, but opted for the higher increase to provide the cash-strapped district with more of a financial cushion.

“We’re doing everything we possibly can to do what’s right for this (district) and get it right without taxing people out of their homes,” board member Bob Pallone said. “We’re in a tough spot here.”

The proposed increase would raise the district’s tax rate to 88.27 mills. At that rate, the owner of a property assessed at $20,000 would owe $1,765 in taxes, or $60 more than this year.

Superintendent John Pallone said administrators will meet with the teachers’ union leaders to discuss offering an early retirement incentive as a way to cut costs. He anticipates two or three positions could be eliminated through incentives.

Getting teachers to retire is difficult because, he said, “We have a very young staff.”

The superintendent said he expects the district’s professional staff of 165 employees to be reduced by six or seven positions, but he didn’t provide specifics. Administrators and board members have mentioned the possibility of furloughs but have not provided details during public meetings.

With a 3-mill increase, the district’s revenue would be $36.9 million — or $1.01 million less than proposed spending. The district would cover the deficit with money from its reserve fund balance, which is expected to be about $1.4 million at the end of the district’s fiscal year.

With the district’s reserves now expected to drop below $400,000 by the end of the 2020-21 school year, the fiscal year after that is already a concern.

Business Manager Jeff McVey said if the district gets to a point where it can’t pay its bills and misses two or three payrolls, the state could come in and make “substantial changes” to the way the district operates.

“It concerns me how close we are for the state to come in,” board member Chelsea Stone said. “I feel like every year we’re closer to that.”

In a state takeover, John Pallone said all labor contracts would be voided and staffing would be reduced from top to bottom.

“They will balance the budget and they’ll balance it on the backs of what you have,” he said.

Board member Terry Schrock said the board needs to protect the district, which he said is “the only real vestige of something to be proud of that’s left in this community.”

“What does New Kensington have? We don’t have the big businesses. We don’t have any huge commercial ventures. New Kensington has the New Kensington-Arnold School District. That’s what this community has to be proud of,” he said. “If this fails, where’s your home value going to be?”