School District Awaits Approval on Possible Tax Increase

By Jason Togyer | Posted in: News

McKeesport Area School District is awaiting state approval on a possible 3.42-mill property tax increase that administrators hope won't be necessary.

"I'm sure by the time we're done with this it's not going to be anywhere near that amount," said David Seropian, district business manager.

Under Pennsylvania law, school districts are allowed to enact a property tax increase only within an "index" --- sort of an "inflation" or "cost-of-living adjustment" --- set by the state. The index for 2018-19 is 2.4 percent.

Property tax increases above that indexed percentage must be put to a referendum by the voters unless certain conditions are met. On Wednesday, McKeesport Area filed its preliminary 2018-19 budget with the state Department of Education and asked for a waiver from the referendum requirement.

Districts may ask for a waiver if the tax increases are necessary for school construction, special education, retirement plan contributions or servicing old debts.

Seropian said McKeesport Area has asked for a waiver under the debt-service exemption.

It's the first time the district has ever had to ask for a waiver, Seropian said.

The district's 2017-18 property tax rate is 17.37 mills. At a special meeting Feb. 13, the school board by 7-1 vote approved a preliminary budget setting property taxes at 20.79 mills. School Director Mindy Sturgess voted "no" and School Director Jim Brown was absent.

Each mill represents $1 for every $1,000 in assessed value of a home. If the full tax increase is approved and enacted, a homeowner whose property is valued at $75,000 could expect their taxes to increase by about $256.50.

The school board has until June to adopt a final budget, Seropian said. "We will hopefully get that (increase) down," he said.

Administrators and board members have already trimmed some of the increase back, he said.

The property tax increase is necessary to make payments on money borrowed to complete school construction and renovation projects, Seropian said.

McKeesport Area's preliminary $67.8 million spending plan for 2018-19, as adopted by the school board, is about 3.5 percent higher than this year's budget, Seropian said.

Charter school payments continue to put pressure on the district's budget, Seropian said. Payments to charter schools in 2018-19 are expected to amount to $6.3 million to McKeesport Area taxpayers, or more than 9 percent of spending.

The district collects about $11.1 million in revenue from property taxes, Seropian said. Tax collections for 2017-18 are running a little bit better than expected, he said.

Compared to nearby Allegheny County districts, school McKeesport Area's tax rate remains in the middle of the pack. According to the county treasurer's office, property tax rates for 2017-18 were set at 17.24 mills in South Allegheny, 22.761 in Steel Valley, 24.4965 in West Mifflin Area and 25.35 in Woodland Hills.

Brentwood property owners pay the highest school taxes, at 29.5332 mills, according to the treasurer's office, while Pittsburgh Public Schools' tax rate is the lowest, at 9.84 mills --- though wage taxes are set at 2 percent instead of the 0.5 percent paid to most Pennsylvania school districts.

Originally published March 02, 2018.

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