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Penn Hills school board considers .5-mill tax increase

Patrick Varine
| Wednesday, May 16, 2012, 10:17 a.m.

The Penn Hills School Board is studying four options for its 2012-13 budget and the final document will likely be a combination of approaches to balancing it, including the possibility of a property tax increase of up to .5 mill.Penn Hills School District business Director Richard Liberto on May 17 presented the options to the board's finance committee and said a combination of selling delinquent real estate, a tax hike and tapping the district's fund balance likely would be needed to close a $2.4 million gap between expenditures and revenues in the $72.6 million plan.Each proposal includes a $50,000 reduction in operational costs. The sale of tax delinquent real estate could bring in up to $2 million, he said.Two proposals call for a tax increase of up to the state limit of .5 mill. Taxes currently are 24.81 mills. The increase would bring in just over $380,000. Two of the proposals would use anywhere from $427,000 to $2 million from the district's fund balance.Liberto warned, however, that selling delinquent properties and dipping into the fund balance might push some revenue woes over into 2013-14.School director Joe Bailey Sr. said he would like to see more details for each budget scenario."I'm looking for a more exact presentation so that we can focus on each individual item," said Bailey, who added he does not favor a tax hike."We've gotten rid of the buses to save money, we've done new construction to save money, so I'd like to see us go another way," he said.Liberto recommended either selling some delinquent property and hiking taxes, which would result in about a $3,000 surplus at the end of the budget year; or selling delinquencies and using $427,000 of the fund balance, which would result in an estimated $50,000 surplus.He said that Penn Hills is owed more than $2 million in state subsidy reimbursements for construction related to the new high school, which he doesn't expect to see soon. Complicating that is Gov. Tom Corbett's decision to combine state funding sources into a flat payment, he said.Since budgeting began in January, school officials have cut a projected $5 million deficit in half by restructuring debt service, reducing operating costs and planning to furlough 14 teachers.Liberto said one bright spot is that the fund balance is projected to grow about $1.8 million in the next school year."We're headed in the right direction, even with the state cutting our funds," he said.

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