Fox Chapel Area residents would pay higher property taxes next year if the school board approves the district’s proposed budget of nearly $125.5 million.
The plan calls for a 3.1% increase in the tax rate, from 22 mills to 22.68 mills. The increase would equate to about an extra $68 in real estate taxes per $100,000 assessed value.
If approved, the owner of a home assessed at the district’s median property value of $233,700 would pay an additional $159 on their tax bill, or $5,300, up from $5,141.
That same property owner with a qualified homestead exemption would pay $4,975.
School board members are scheduled to vote on the final budget June 8.
Officials cited several reasons for the proposed tax hike, including little increase in real estate values because of appeals. Also, minimal increases are expected in state funding: about 1.7% for basic education subsidies and 1.3% for special education, according to Bonnie Berzonski, district coordinator of communications.
The potential tax increase would follow last year’s bump of 2.1% and would fall below the district’s 3.5% maximum allowed under the Act 1 index, a state formula based on the inflation rate that limits how much district’s can raise property tax hikes without voters’ approval.
Each mill generates about $3.7 million for the district.
Eric Hamilton, board finance chairman, said no programs will be cut.
The district plans to hire teachers to accommodate rising enrollment, he said.
“The district is also having to raise the millage rate to compensate for substantial property tax appeals that are eroding our tax base. This is an issue every district is facing and will continue to push tax rates higher across the county until a countywide reassessment is done,” Hamilton said.
Next year’s expenses are projected to total about $125.5 million — 70% of which comprise salaries and benefits. Revenue is set to come in at about $123.5 million.
Director of finance Ryan Manzer said expenses include about $1.5 million in emergency/unanticipated costs. The tax increase is necessary because of rising personnel costs, including salaries, benefits and pensions, he said.
The budget will be balanced through the tax increase along with a portion of the fund balance. Manzer said about $440,000 is expected to be pulled from the district’s $10.8 million unassigned reserves.
Administrators and various committees started working on a budget draft in December shortly after Manzer arrived to Fox Chapel Area from Plum School District.
“It’s a really detailed-oriented process,” he said.
There are no cuts to services, Manzer said.
The projected $2.7 million in additional revenue from the 0.6822-mill tax hike will be used for various facility upgrades with high school HVAC improvements being the most immediate, Manzer said.
“We’re always very aware of the impacts of a tax increase,” Manzer said. “We work as hard as we possibly can to make increase the lowest (and make) the most efficient budget that we possibly can.”
Highlights of the proposal include:
• An 8.3% increase in health insurance costs and 3% for dental coverage.
• A 33.5% district contribution rate to the Public School Employees’ Retirement System, which accounts for 14% of the overall budget. The district anticipates paying more than $44 million in retirement contributions during the next five years.
• A $1.6 million transfer to the capital projects fund to support future work as part of the district’s multiphase plan to repair and replace equipment and aging infrastructure.
Residents can review the proposal online at fcasd.edu. It also is available at the district’s administrative offices.
About the proposed tax increase
Here is how the Fox Chapel Area school tax bill would change on a property valued at the district’s median property value of $233,700:
Current tax rate: 22 mills
Current tax bill: $5,141
Proposed tax rate: 22.68
Proposed tax bill: $5,300
Proposed tax increase: $159