Apr 9, 2015 By Nick Lewandowski 3 min read

The Mt. Lebanon School Board will raise taxes, use fund balance and make cost reductions to eliminate the $2.4 million deficit it faces during the upcoming school year.

“The staring point for this discussion is always cutting as far away from the classroom as possible,” school board president Lawrence Lebowitz said at the April 7 school board meeting. “At the same time, we have substantial concerns about the tax burden imposed on members of our community, many of whom are senior citizens on fixed incomes.”

He added that there are few “easy cuts” in the 2015-2016 budget.

State-mandated increases in Pennsylvania State Employee Retirement System (PSERS) contributions continue to pressure district finances. The PSERS contribution rate will rise from 21.4 percent to 25.84 percent for the upcoming school year, and is projected to reach 31.28 percent by the fall of 2018.

Employee healthcare costs will also increase from current levels in the coming year, by about 2.75 percent.

On top of that, uncertainties remain regarding staffing needs for the upcoming school year, as well as final property assessment values and the exact timing of the state’s long-anticipated PlanCon reimbursement for the district’s high school renovation project. Contract negotiations with the local teachers’ union, the MLEA, are also ongoing.

School board members reached a broad consensus to target a .42 mill tax increase, which would cover the mandatory increase in PSERS contributions. The district would also use $750,000 of fund balance and cut approximately $581,000 in expenses.

Superintendent Dr. Timothy Steinhauer explained that cost savings would be realized primarily by not replacing retiring staff. He said it may also be possible to pay for certain capital items included in the operating budget, such as new textbooks and computers, from the district’s capital projects fund.

Not surprisingly, despite the general consensus, some board members expressed strong preferences for certain methods.

William Moorhead said he would like to use more than $750,000 of fund balance, while Dan Remely preferred to keep the tax increase under .42 mills, reducing it to .25 mills if possible.

“This should be the year of the taxpayer,” Remely said.

In past years, the board has shied away from using large portions of fund balance, which are essentially one-time funds, to make up for recurring budget shortfalls. Finance director Jan Klein advised that adopting such a strategy could eventually put the district in a precarious financial position, damaging its bond rating and increasing borrowing costs.

Similarly, board members expressed discomfort with the magnitude of budget cuts necessary to keep the tax increase under .42 mills.

Going forward, the administration will refine the numbers and post a preliminary budget on the district website for review. The school board will vote on a final budget in May.