At Tuesday’s school board meeting, Pen Argyl officials projected a 2.7 percent tax increase for the 2014-15 school year which they attribute to growing retirement, cyber school and charter school costs.
During the meeting, district officials unveiled their projected budget for the upcoming school year, which is expected to raise the area’s millage rate from 47.26 to 48.52, an increase of 1.27 mills.
According to officials, this will result in $63 tax increase for local citizens with homes valued at $50,000, an approximation for the regional average.
The tax increase, board members say, could have been avoided were it not for the growing costs of retirement benefits and cyber and charter schools seen across the state.
“If not for the large increase in cyber school costs and the big spikes in pension, we would have probably less than a zero percent tax increase,” said Pen Argyl Superintendent Dr. William Haberl.
The district’s contribution to the state retirement system is projected to go up by 28 percent this year, resulting in a $553,790 increase.
“This is one of the areas driving the budget, not just here but across the state,” Haberl said.
Meanwhile, the cost of cyber schools, which the superintendent claims are becoming increasingly popular, will go up from $492,451 to $680,590, an increase of 38.2 percent.
In the past two decades, the costs of benefits have more than doubled, currently comprising of 25.7 percent of the district’s budget, while relative spending on salaries has gradually decreased.
The school district has also seen dwindling contributions from the state level, which officials claim is a continued cause for concern.
“Our legislators need to get their act together on figuring out how they’re going to get this handled,” said board member Ethan Habrial, of a potential decrease in state funds for education. “That’s a loss of a lot of money.”
According to Pen Argyl Business Administrator Walter Schlegel Jr., some of the education funds allocated by the state have been earmarked in a way that makes them difficult to utilize by the school district.
“We knew that there’d be an increase [in education funds] this year because it’s an election year. The catch is it has to be spent on all new programs which makes it useless for us” he said “The last thing we need is new expenditures.”
Schelegel also spoke of a struggling real estate market, but highlighted some potentially positive signs as well.
“We have very minimal growth,” he said. “Total sales have been picking up [though] so there is some sign of improvement in the economy.”
The Pen Argyl school board will now advertise the budget following Tuesday’s meeting.
Discussions of the final budget will continue until the final approval deadline of June 30.