Mt. Lebanon School District’s proposed budget calls for a 3.5% tax increase for property owners.
The $129.2 million proposed spending plan maintains all district services and programs, and has no furloughs, said Patricia Connolly, the district’s director of operations.
The proposal increases the district’s millage rate from 30.95 mills to 32.033, a 3.5% increase, Connolly said. The value of 1 mill is $3.2 million.
For a home assessed at Mt. Lebanon’s median assessed value of $191,300, a 3.5% tax hike would increase the annual tax bill by about $207, to $6,127 from $5,920, before any exclusions or discounts are applied.
Financial picture
Real estate revenues account for about 64% of the district’s overall revenues. Those revenues have decreased because of property assessment appeals — the municipality’s property values last school year totaled around $2.75 billion, a $3.37 million decrease from the prior year.
Connolly has said previously that state revenue has not kept pace with increasing expenses that school districts are experiencing with regular and special education. At the same time, she expects federal revenue to decrease.
About 84% of budget expenses for next year are related to salary, benefits and bond payments.
Projected department and curricular expenses for next year are flat or below last year’s levels. There is an 8.3% increase in health care premiums, scheduled salary increases and hikes to special education, charter school and career technology center tuition, Connolly said.
Earlier this year, the school board had allowed the administration to furlough up to 15 employees, if needed, to close what was a $4.1 million budget gap at the time. The proposed budget is balanced and there are no furloughs, Connolly said.
Why not pull from the fund balance?
Connolly said the district had a “depleted fund balance” four years ago. School officials made it a priority to rebuild the fund balance and maintain an unassigned fund balance of 8%, Connolly said.
“Reaching and maintaining an 8% unassigned fund balance is critical for improving the district’s credit profile,” she said.
Doing so supports a higher rating from Moody’s Investors Service, signaling lower credit risk and higher credit quality, Connolly said.
“After six years of decline, the district’s Moody’s rating has now stabilized,” Connolly said.
For the first time in six years, the district was able to contribute to its fund balance, adding $2.8 million from a year-end surplus in the 2024-25 school year, Connolly said. That increased the unassigned fund balance to about $7.5 million, or 5.99%, bringing it closer to the 8% target.
“The district has been able to continue funding curriculum adoptions, maintain comparable staffing ratios, and support the educational programs that serve our students,” she said. “The improvements made over the past two years, through stronger processes and difficult but necessary financial decisions, have positioned the district for greater long-term financial stability.”
Final budget adoption is slated for a May 18 school board meeting.