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Penn-Trafford expects minimal tax increase

| Wednesday, Jan. 6, 2010

Any tax increase enacted by the Penn-Trafford School Board for the 2010-11 fiscal year is expected to be minimal.

However, that may not be the case in subsequent years when the district may have to significantly increase contributions to the state teachers' retirement fund.

In keeping with the Taxpayer Relief Act, the board is expected to vote Jan. 11 on a resolution limiting any tax increase to no more than 2.7 mills in the next budget. A district must state in January that it promises to keep tax increases within an inflationary index percentage set by the state Department of Education.

The formula established sets Penn-Trafford's index at 3.9 percent, meaning the district could increase property taxes only by 3.9 percent.

"The board decided that they want to live within the index," said Brett Lago, business manager. "We can go up to 2.7 mills, but that's not necessarily saying we will go 2.7 mills. That's as far as we can go."

But district contributions into the state teachers' retirement fund could increase by as much as 700 percent by the 2012-13 school year.

"In our case, that's somewhere north of 10 mills over the next three years," Lago said. "It certainly is a great concern that we have going forward.

"Without some legislative relief, not just us, but every school district in Pennsylvania is going to be in dire straits over this retirement situation," Lago said. "We do have to keep an eye on trying to do some things for the upcoming pension situation."

When the board approved its budget in June, it held the line on property taxes at 71.25 mills. However, there was some sentiment among a few members for a slight tax increase to help offset potential expenditures in coming years.

School Director Nick Petrucci -- who was one who voted against the budget in June -- asked Lago to develop a long-range financial plan projecting how taxes might increase.

"I was the guy that wanted 1 mill for renovation, but I think we have to address the retirement situation first, because it's immediate," Petrucci said.

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