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Schools ponder tax hikes

| Saturday, Feb. 15, 2003

Stagnant revenues, rising health care costs and other factors have some south and west suburban school districts considering property tax increases.

The same worries are playing out statewide. Thomas Gentzel, executive director of the Pennsylvania School Boards Association, said Friday that districts statewide could be looking at tax increases in the coming year.

"These are difficult times for a lot of reasons," he said. "It looks like the fiscal year starting July 1 is fairly bleak."

One area likely to be affected is Findlay, long favored by US Airways employees because Pittsburgh International Airport is located there. But the airline's continuing layoffs have cut into the earned income tax revenues that the township and the West Allegheny School District share.

As a result, West Allegheny School District might move to raise its 17.1-mill tax rate.

"Like all school districts, we are caught with increases mandated by contracts for salaries," district Business Manager Jerry Wessel said, "and we will soon get hit with the latest in natural gas increases."

Wessel said the district "took a little bit of a loss" because of airline layoffs, but he predicted the biggest impact on the 2003-04 budget will be a 22 percent to 25 percent increase in health care costs.

"Our growth offsets some of that," he said, referring to construction of new homes and businesses in North Fayette and Findlay. "But because we are not seeing an increase in earned income tax and other things, it does not bode well for keeping our millage rate the same." West Allegheny has not raised taxes in nine years.

In Upper St. Clair, Jane Sierzega, the district's finance director, predicted a $370,000 shortfall because of lower real estate tax collections, although she said revenue from the earned income tax is on track.

"We do have a problem with the number of assessment appeals which have been awarded in favor of the taxpayers," she said, and interest income on investments also has also fallen short of expectations.

"We estimated earning 2 percent, but we have seen some rates drop below 1 percent," she said.

If these shortfalls become a problem in building a budget for 2003-04, "We have no other rates to raise, other than real estate, to garner additional revenue." School taxes in Upper St. Clair are 21.11 mills.

Moon Area School District plans no tax rate increase, despite expected lower revenues.

"Our board has asked us to put together a package without a tax increase," said Alan Bennett, director of fiscal and school services.

Next year will bring significant increases in employee health insurance costs, retirement contributions and staff wages and salaries, to the tune of about $100,000, Bennett said.

But the impact will be eased by higher-than-expected collections of delinquent taxes, he said.

Still, Bennett said increasing the current 17.4-mill tax rate might be necessary in the long term. Building projects are planned in the next three years, and this will mean additional debt to be repaid. Moon Area officials, in fact, will conduct a meeting at 7 p.m. Wednesday in the middle school cafeteria to talk about projects and their possible tax impact.

A spokeswoman for the Pennsylvania Department of Education also said tough economic conditions are forcing districts across the state to take a hard look at their budgets.

"Considering there is a continuing disadvantage for funds throughout the state and even the country all organizations have had to reduce spending and find other ways to make up for shortfalls in their budgets," Shanna McClintock said. "Many school districts may have to resort to raising property taxes in order to increase the funds for the school."

State Rep. Jess Stairs, a Westmoreland County Republican and head of the House education committee, said he doesn't have any idea how much the state might be contributing to school district's budgets.

"I can understand why school board members and superintendents are on edge," Stairs said. "Hopefully, we can do something to alleviate any potential property (tax) increases."

Staff writer Dominick DiRienzo contributed to this report.

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