North Allegheny School District’s 2025-26 proposed budget includes no increase in the millage rate, which would remain at 19.74 mills.
A vote on the final general fund budget is scheduled for June 11 by the school board and will take effect July 1, according to Kermit Houser, finance director for North Allegheny.
The proposed $203,342,605 budget will be on public display for at least 20 days at school buildings, municipal buildings and Northland Public Library.
This will be the fourth year in a row that North Allegheny has kept the millage rate at 19.74 mills, which doesn’t happen often, Houser said.
“It did occur once before in the mid-1990s when millage rates were held for four years. That’s something that we think we’re able to do for this next coming school year,” Houser said.
Using millage rates from 2024-25, North Allegheny has the fourth lowest out of 41 comparable districts. The current average millage rate is 24.98, according to the budget presentation.
Based on 2024-25 millage rates, North Allegheny is lower than Bethel Park, Fox Chapel Area, Mt. Lebanon and Upper St. Clair. It is higher than Pine-Richland, which currently is at 19.58 mills.
“I think that’s something for all of us to be proud of,” said school board President Elizabeth Warner.
North Allegheny’s preliminary budget was passed in October, which also was when the school board passed the Act 1 resolution, stating the district would not need to increase taxes over a certain index. The index for North Allegheny this year was 4%, Houser said.
The 2024-25 budget was about $199 million.
Revenue in the proposed budget falls slightly short of expenditures at an expected $578,000 deficit, which “we will try to make up or make even” over the year, Houser said.
The estimated assessed value of North Allegheny, assuming a 1.0% growth from the prior year, equates to $6.59 billion, according to the proposed budget. The average district residential assessed property value is $254,374. The estimated value of 1 mill is $6.5 million.
Homestead Farmstead exclusion is estimated at $218 per household or homestead, which Houser said should be known by the state by May.
The budget planning is guided by the district’s strategic and comprehensive plan and begins as soon as school starts. Houser said the finance department works with teams in the district year-round on what they think is going to be spent the following year.
“It really is an all-year process,” Houser said. “As they are getting ready to greet students, we are actually looking for them to look a year ahead for data collection.”
Salaries and benefits make up more than 75% of expenditures of the proposed budget, with the remaining budget expenditures covering costs such as supplies, buses or debt obligation.
More than 8% is reserved for the district’s debt and lease obligations. The proposed final budget also includes $2 million of capital and technology fund transfers for the sustainable infrastructure plan, bus purchases and money set aside for capital improvement.
There is an increase in third-party contracted carrier services because of a macro-driver shortage, he said.
The Public School Employees’ Retirement System employer contribution rate increased from the current 33.90% to 34% in this year’s proposed budget. That rate is expected to increase to 38.51% by 2032-33, Houser said.
PSERS is a big expense for the school district. For every dollar North Allegheny spends on PSERS, the state reimburses the district 50 cents, Houser said.
“The larger our payroll, the larger are PSERS expenses is, the larger that state funding is,” he said.
Warner commented that though the PSERS increase this year is small, the anticipated increase over the next seven years is 13%.
“That’s a huge increase,” she said. “It’s really frustrating that we still have to anticipate moving up to 38% for PSERS.”
North Allegheny also was affected by the common-level ratio real estate reimbursements.
“We really got hit hard with refunds we had to pay out. I think it’s settled down. I think it’s something that occurred over last few years,” Houser said.
On the revenue side, roughly 76% of the school funding is locally driven, with about 60% derived from current real estate. Another 14% is other local revenue.
Local revenue earned income tax reflects an increase of 4.7% from the current budget.
State funding makes up nearly a quarter of North Allegheny’s revenue. This includes basic education funding, which is not yet available from the state but is estimated at $13.6 million based on the latest budget information, and special education funding, which is estimated at $4.7 million, according to the presentation.
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Federal funding is a small portion of the revenue, which only contributes an estimated 1% or 1.5% of funding, Houser said.
District officials will continue to reassess expenses and revenues as they look toward the future, he said.
Potential building renovations and updates throughout the district, including at the high schools, have been presented and discussed at previous board meetings. Houser said this budget gives them to time to reassess what would happen in the economy and overall as the district prepares for future decisions.
“We are positioned well after this budget to look into the future. It doesn’t hurt us. Let’s put it that way,” said Houser, adding after next year “there will be additional discussions that would need to take place as more information comes into light.”
School director Richard McClure commented on the “depth and quality of analysis and prediction and work” that goes into the budget process.
“This is really a remarkable effort. We are blessed to have this level of information and reliability (with), as you noted, a tiny, tiny variance,” McClure said.
School director Elizabeth Blackburn, who has been on the board for more than a decade, agreed.
“I was here when our budget was over $8 million off. The minuscule amount is pretty amazing,” she said.
Houser acknowledged the hard work of the whole finance department team.
Superintendent Dr. Brendan Hyland commented on Houser’s “eagerness to work with the entire administration from executive council all the way to building level to make sure he’s getting a full understanding of what the needs are for our students and for our staff.”
The budget can be viewed online at northallegheny.org and is on display at school buildings, local municipal buildings and Northland Public Library.