Residents of the Conestoga Valley School District would pay nearly 5 percent more in property taxes under a 2016-17 budget proposal that has the support of a majority of board members.
The increase, which would exceed the state’s cap on tax hikes, is necessary to cover pension costs that have risen dramatically and prevent program cuts amid a bleak financial picture, board members said.
The increase would cost the owner of an average home in the district — assessed at $167,121 — $119 more in the tax year that begins July 1. The total tax bill would be $2,657.
The school board is expected to vote on the $66.6 million budget at its 7 p.m. meeting tonight at the district office, 2110 Horseshoe Road.
Spending would increase by more than 4 percent over the current school year, an increase driven by a $1.3 million spike in costs as part of the Public School Employees’ Retirement System, the board said.
“The (PSERS) rate continues to climb each year out of our control,” said board President Merle Esh.
The rise in spending is also driven by a 3.5 percent increase in salaries and 5.3 percent increase in special education.
The revenue side of the budget shows $64.3 million, leaving a shortfall that will be covered mainly by $2.3 million in reserves specifically set aside to cover rises in retirement and health care costs.
The board has spent months reviewing budget options that use the Act 1 index (the allowable percentage of millage increase as set by the state Department of Education) of 2.4 percent, plus an additional amount, or exceptions, the state allows to cover special education and retirement costs.
“If we have enough board members that want to go to the full exceptions, then I think we should do it. It’s the most prudent thing we can do this year,” said board member John Smucker.
The full tax increase allowed, including exceptions, is 4.72 percent.
The board was presented last week with a tax increase of 3.92 percent, but most members said they supported the full amount. The proposed budget calls for the elimination of the per capita tax, or head tax, which charges $15 for every adult residing at a property.
Smucker and four others — Esh, Charles Maines, Julia Reed and Craig Esbenshade — said in a straw poll they support the higher 4.72 percent increase. Daryl Stoltzfus and Michael Talley said they support the 3.92 percent increase; that budget includes the full special education exception and one-fourth of the retirement exception.
Idette Groff supports neither option. Todd Shertzer was absent.
Some of those in favor of the larger increase said they believe the next fiscal year will be bleaker, and they want to avoid cutting programs as a result.
Superintendent Gerald Huesken said the budget picture reflects a loss of revenues from assessment appeals, decreasing property values and a lack of growth in the district.
Other key facts:
— The budget reflects a cost per pupil of $15,645, about $650 more than this year.
— Health care options for employees changed, which saves money in the long run but uses $1 million from savings in 2016-17.
LNP correspondent Donna Walker contributed to this report.