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Tax increase included in preliminary school budget: Here is how much more you would pay

By Dan Miller danmiller@pressandjournal.com
Posted 5/12/17

A 1.23 percent tax increase for 2017-18 is included in a preliminary budget that Middletown Area School Board plans to adopt during its next meeting on Monday, May 15.

But the tax increase is …

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Tax increase included in preliminary school budget: Here is how much more you would pay

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A 1.23 percent tax increase for 2017-18 is included in a preliminary budget that Middletown Area School Board plans to adopt during its next meeting on Monday, May 15.

But the tax increase is expected to be lower when the board gives final approval to the budget in June, said David Franklin, chief financial officer for Middletown Area School District.

“There is a strong desire for the final budget to have no tax increase and we will be working toward that goal,” Franklin said in an email to the Press & Journal.

The school board meeting starts at 7 p.m. in the board room in Middletown Area High School.

A 1.23 percent hike would mean a $27.15 increase in the school district real estate tax bill for a property assessed at $100,000, Franklin said. A 1.23 percent tax increase would bring in about $255,000 in additional revenue.

The school board has not increased taxes since 2014-2015, when the rate went up 1.56 percent.

District spending is increasing by $1.3 million — 3 percent — from $43.7 million in 2016-17 to just more than $45 million for 2017-18.

Increases in salaries and benefits are the biggest factor driving the tax increase, Franklin said. Salaries and benefits are up $1.4 million, meaning all other areas of the budget are decreasing by a combined $100,000.

The district’s mandated contribution to the state Public School Employees’ Retirement System is going up nearly $600,000 — to $5.8 million for 2017-18.

But the district using fund balance money to cover part of the PSERS increase. The district is setting aside reserves to “offset” projected increases in the annual employer retirement contribution through 2034-35, Franklin said.

The district’s contribution to the state retirement system has gone from 2.48 percent of the district budget in 2010-11 to 12.94 percent for 2017-18, according to Franklin.

Without the employer retirement contribution, district spending has gone up less than 1 percent each year since 2010-11, he said.

A big reason for the district avoiding a tax increase since 2014-15 is that the total assessed value of all property in the school district has gone up in each of the last two years — meaning more tax revenue coming into the district.

But districtwide assessed value is projected to decrease by $4.3 million in 2017-18, translating into a loss of $100,000 in property tax revenue to the school district.

The reduction in assessed value is from Dauphin County approving assessment appeals that were filed with the county, Franklin said.

No district programs are slated to be cut or eliminated in 2017-18 and there are no staff reductions. No programs are being expanded. However, the 2017-18 budget continues funding three new positions added to address needs identified after the board adopted the 2016-17 budget.

These include an intervention specialist teaching position to increase student achievement, and two positions added to improve district grounds and athletic fields, Franklin said.

In the longer-term, the district hopes to reduce costs by bringing alternative education in-house instead of contracting with outside agencies.

Middletown Area is also part of a consortium of school districts in Dauphin County that has formed to lower special education costs by sharing services, Franklin noted.