The Nazareth Area School District is looking at a proposed 1.9 percent increase in property taxes to help fund a 2013-2014 budget that calls for a 3.8 percent increase in spending.
The spending increase is caused largely by higher salary and benefit costs, especially higher pension contributions.
In fact, pension contributions are forecast to rise significantly in upcoming years. This year’s contribution rate to the Public School Employees’ Retirement System is 12.36 percent. That amount would rise to 16.75 percent in the upcoming school year.
The proposed $70.84 million budget calls for spending at each of the district’s six schools to be cut by 5 percent and for spending in various departments to stay the same as this year’s levels.
The administration unveiled its proposed spending plan Tuesday night at a meeting of the school board’s Audit and Finance Committee. Business administrator Bernadine Rishcoff gave the presentation. Superintendent Dennis Riker also contributed.
Nothing was said about any need for staffing cuts. The proposed budget says salaries increased from 3.5 percent to 3.75 percent, depending on the contract involved.
The proposed 1.9 percent tax hike translates into .92 mills. That compares with a 1.8 percent or .86-mill hike enacted for the current school year. The proposed millage would go from the current 48.55 to 49.47.
Rishcoff pointed out that the proposed tax hike is in line with a state index that calls for the district’s hike to be .971 mills or 2 percent.
The proposed 3.8 percent spending increase comes to $2.57 million.
Increases in salaries and benefits would equal $3.11 million. But spending cuts and other adjustments brought down the total spending increase to $2.57 million.
Salary costs as a whole would increase 4.75 percent and benefits would go up 12.55 percent.
Other changes in the proposed budget include:
- $169,898, or 4.8 percent more for transportation.
- $140,000, or 19.7 percent more for charter schools.
- $817,934, or 9.9 percent less for debt.
- $93,842, or 3.6 percent less for special education.
- $40,000 or 2.7 percent less for vocational education.
Board president Lorin Bradley wondered if the proposed budget -- aside from salaries and benefits -- could be characterized as a “flat” budget because of the 5 percent spending cuts at the schools and no increases in departmental spending.
But board member Robert Pinel said “flat” wouldn’t be accurate because the proposed budget total is rising.
”If the numbers go up, you can’t call it a decrease,” he said.
Other taxes that would remain the same are the 1 percent real estate transfer tax (the school district gets half of that) and a .7 percent earned income tax. That is the district’s share. The budget resolution points out that earned income levies vary by municipality.
The budget resolution also calls for the tentative adoption of the $1.07 million athletic fund budget and approval of $931,200 in fund transfers throughout the school year from the general fund to the athletic fund.
Rishcoff repeatedly returned to higher and higher pension contributions in upcoming years.
The proposed contribution for 2013-2014 would be 16.75 percent. In the following years, the projected rates would be 21.75 percent, 25.56 percent, 26.26 percent and 26.80 percent.
She noted that the state reimburses the district for half of its pension payments.
Rishcoff listed the pension payments at the top of a list she called the “five major areas of concern.” The others are:
- The current condition of the economy and its recovery.
- The level of state funding. Rishcoff said the proposed budget lists state funding as unchanged.
- Real estate assessment appeals and the future growth of real estate assessments.
- Any major change in health-care costs due to usage and health-care reform.
The proposed budget will be presented to the full board at its Dec. 10 meeting. Preliminary budget adoption is set for Jan. 28. Rishcoff said final adoption is expected in May.