Peters Township School District facing $2.5 million budget shortfall
Peters Township School District is faced with a $2.5 million budget gap for the 2015-2016 school year, which makes a tax increase for township residents likely.
But no final decision will take place until the end of June, when the final budget will be adopted, said Shelly Belcher, a district spokeswoman. The district’s fiscal year ends June 30.
At a finance committee meeting Jan. 12, Superintendent Jeannine French told board members that the 2015-2016 budget should total $60.45 million, but projected revenues come to $57.91 million, leaving the $2.5 million gap that needs to be bridged.
“(The) millage rate has steadily increased, but remains second lowest among Washington County school districts,” French said during her presentation of the 2015-2016 preliminary budget. She said the district’s millage rate – 107.142 mills – is considerably lower than Allegheny County equivalents in similar communities.
“Revenue from taxable property is rising slightly, but at a lesser rate than in years prior,” she said.
Indeed – the district benefitted from the new construction boom of the late 1990s and early 2000s, but housing starts have tapered off in recent years. Compounding matters for district coffers is the fact that enrollment is projected to decline slightly and revenue from the state is expected to remain flat next year.
French said the district gets more than 70 percent of its revenue from local sources, under 30 percent from the state and incremental amounts from items such as donations.
Because of its financial outlook, the district is considering a 2.03 millage increase, which would bring next year’s budget gap to $1.87 million. The district would then look at ways it could cut costs, French said.
For township residents, the potential school tax increase would be relatively small, according to information provided by the district. If a property owner’s school tax is $500 a year, his payment would increase by $9.47 a year; if his school taxes were $1,000, the amount would increase by $18.95 a year; $1,500 would see a $28.42 increase; $2,000, and so on. The average household income in the township is $152,000, said board member William Merrell.
Besides flat revenue, French said there are increased expenditures that the district is obligated to pay, such as salary hikes, health care costs, debt service and retirement contributions. For example, contractual and mandated staff cost increases are expected to be more than $3.6 million in 2015-2016. Public School Employees Retirement System – PSERS – retirement costs are increasing from 21.4 percent to 25.84 percent in 2015-2016, a $1.7 million hike. And health care costs are going up by five percent, French said.
“Without action, our projected expenditures for 2015-16 will significantly exceed projected revenues,” French said.