Addressing rising costs, inflation and other financial needs, a higher tax bill for residents in the North Allegheny School District is on the table as the proposed final budget was approved with a raise in millage rate to 20.43 from the current 19.74.
The school board approved the proposed final budget, 8 to 1, at its April 15 combined meeting with director Libby Blackburn opposed. The final vote will be held at the May 20 school board meeting.
“No one welcomes a tax increase. It’s a reality we take seriously, and it’s never a decision this board or administration approaches lightly,” Superintendent Brendan Hyland said.
The district has remained transparent and communicated the financial pressures facing North Allegheny and the likely need for additional revenue, Hyland said.
“Tonight’s recommendation was not a surprise but a result of thoughtful, deliberate planning,” he said.
The impact of inflation, effects of the Common Level Ratio appeals and the need to remain competitive in a tightening labor market to attract and retain quality teachers, administrators and staff, as well as maintaining high-level programming, contributed to the decision.
The 2026-27 Proposed Final Budget is estimated at $210,949,395 with the levying of 20.4309 mills. This is consistent with what was presented in the preliminary budget in October when the board approved the Act 1 index of 3.5%, according to Kermit Houser, North Allegheny’s finance director.
By voting to stay within the Act 1 index, it limits the annual property increase a school district can propose without voter approval.
The district worked at balancing fiscal responsibility with student needs and community expectations for a school district known for its quality education, Hyland said.
Even with a proposed increase, North Allegheny will remain among one of the lowest tax districts in Allegheny County and is still expected to be in the bottom five after the increase for overall millage rates for 41 comparable districts, he said.
The annual impact of the proposed 19.74 mills to 20.4309 mills is about $69 per $100,000 of assessed value or an additional $6 per month, according to the budget presentation.
Salaries and benefits dominate the expenses at approximately 75% of the annual budget or more than $160 million. This included a 16% medical renewal rate in January.
Another big expense for the district is its annual contribution to the Public School Employees’ Retirement System for staff. While the rate will decrease from 34% this year to 33.59% in 2026-27, the school district’s mandatory contribution rate is expected to continue to increase annually, reaching 37.48% by 2033-34.
The state reimburses a portion of this cost.
Other expenses include an increase to third-party contracted transportation and a one-time purchase of textbooks. There also will be a transfer of $2 million to the district’s capital and technology fund.
The average residential assessed value is approximately $254,459, equating to an average impact of $176 annually or $15 per month, according to Houser.
Residents can get a portion of these taxes back through the Homestead Farmstead Exclusion, which is estimated at approximately $240. But that value won’t be available from the county until possibly May.
The budget is nearly balanced with total revenues projected at $210,582,460 and expenses at $210,949,395. The projected ending fund balance as of June 2027, assigned and unassigned, is $28,136,055 or approximately 13% of the budget.
A fund balance is necessary in order to fund expenses in the summer months because, based on the timing of cash flow, the district does not receive a majority of its funding until mid-September, Houser said.
The school auditor recommended maintaining about two months’ worth of expenses in the fund balance, according school board President Elizabeth Warner.
Having a strong balance also maintains North Allegheny’s Double-AA rating, a beneficial situation for a school district. This lowers debt costs and results in better interest rates when borrowing.
The school district will have to acquire new debt for a $10 million bond offering for initial funding of the renovation of three elementary schools — and both of the high schools.
Early cost estimates for the overall renovation of the three elementary schools and the intermediate and senior high schools, including a reconstruction of the natatorium, is more than $226 million, as of a March presentation to the school board. Construction completion will vary between the schools but is proposed to be between 2028 and 2030.
The majority of the budget, $159 million, is funded by local revenue, mostly of current real estate. This includes the assumed growth rate of 0.59%.
“This really determines what revenue we can expect for next year,” said Houser, in the preliminary budget presentation in October.
Because the state has not passed its budget yet, the school district is estimating it will receive $48 million. Federal revenue is $3.1 million. The Act 1 index equates to approximately $4.5 million of additional revenue.
North Allegheny’s millage rate currently is more than 23% lower than the county average, which is more than 25.6, according to the presentation.
The district finance department’s budget preparation begins in the fall, working with budget owners, department heads, principals and administration on the following years’ projected budgetary needs to create a preliminary budget. This was presented and passed by the school board in November.
The proposed final budget will be distributed to all local municipalities, Northland Public Library and school buildings for public inspection.
Houser said the budget document already is online via the Board Docs page under the School Board tab at northallegheny.org. It must be distributed to all local municipalities, the library and school buildings at least 20 days before final approval.
The final budget for 2026-27 will be reviewed for any necessary changes and voted upon at the school board’s meeting at 7 p.m. May 20.