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Group calls for tax hike to keep reserves

| Friday, May 30, 2003

A slight tax hike might be in the offing to keep the Penn Hills School District from dipping too deeply into its reserve accounts, officials say.

The preliminary $57 million budget passed by the school board calls for the district to use about $3.5 million of the district's fund balance, holding the tax rate at 18.25 mills.

Business Manager Bruce Dakan expects the fund balance to be $4.5 million -- primarily in technology and capital reserve accounts -- at the end of the current school year.

The district hasn't hiked taxes since 1993-94, but Dakan warns that will change after next school year, if not sooner. He's preparing projections for the 2004-05 school year to determine how much taxes will be increased.

"It's too early to speculate on how much it might be," Superintendent Samuel DePaul said.

Initial discussion at this week's public hearing on the proposed budget placed the potential increase in 2004-05 at 3 mills to 5 mills. One mill generates about $1.4 million.

Because of the size of those looming hikes, board member Linda Schlegel and some parents have proposed a smaller, incremental tax increase to reduce the amount of money that would be tapped from reserve accounts next school year. Schlegel opposed the preliminary budget based on the $3.5 million dip into reserve accounts.

"Due to some concern over the fund balance, the question has now come up about what would happen if we raised taxes by 1 mill," DePaul said.

Compounding the district's budget woes is uncertainty surrounding state money. Gov. Ed Rendell and the state Legislature now are sparring over educational and tax proposals floated by the governor earlier this year.

"That's the other big variable in the budget," Dakan said.

The preliminary budget already makes allowances for increased spending on new state initiatives for early childhood development and student achievement. More state money for such initiatives could come if Rendell's proposals make it into the final state budget.

"We have everything in there already, funded at the local level," DePaul said. "And if the governor comes through, we'll probably be able to come out of it with a large chunk of money. But with all the uncertainties at the state level, it's a crap-shoot."

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