Property owners in the New Kensington-Arnold School District may be facing a property tax increase after all.
While the school board approved a $48.9 million preliminary 2023-24 budget in May that carried no increase, the board’s finance committee now is recommending a 1.5-mill hike.
That would increase the district’s tax rate from 96.14 mills to 97.64 mills. For a home at the median assessed value of $14,600, the annual school property tax bill would increase $22, from $1,404 to $1,426.
An increase of 1.5 mills raises the district’s tax rate by about 1.6%. The district can increase the rate by up to 6.1% under its state-imposed inflation limit.
Last year, the district increased the tax rate by 5%, 4.57 mills, the most that was allowed.
Paying for current and future work on the district’s schools is motivating consideration of a property tax increase.
“The district has a significant number of projects currently in progress. As those projects progress, there have been change orders to address problems that have been encountered,” Business Manager Jeffrey McVey said. “In addition, there are a number of projects that will be performed over the summer. The committee discussed concerns as to whether sufficient funding was available to cover current capital project costs.”
The finance committee decided to propose transferring $2 million from the district’s general fund balance to capital projects to cover those costs, McVey said.
“The object of the fund balance transfer is to reserve current surpluses to fund projects in the future instead of borrowing the funds through a bond issue,” he said.
McVey said some of the reserve is for items officials know need to be done in the near future, such as parking lots, windows, flooring, ceilings and painting. Boilers also are a looming project, but there is no timetable for that project.
The committee also discussed a decrease in the district’s total assessed property value.
Because of the reduction in assessed property value from 2022 to 2023, McVey said the district is budgeted to get about $9.1 million in real estate tax revenue next school year. That’s about $175,000, or 2%, less than the $9.3 million projected for the school year that’s ending.
McVey said the district’s assessed value has decreased every year he has been at the district, since January 2010. From 2022-23 to 2023-24, the value decreased just over 1%, from about $124.73 million to $123.4 million.
The district’s proposed final budget now is showing total revenue of about $50.8 million and total spending of $40.9 million. That leaves a surplus of $9.9 million.
About $5.4 million of the surplus would be spent on renovations, while another $4.2 million would go to debt service. That would leave a surplus of about $381,600.
That surplus would increase the district’s fund balance from $5.3 million at the start of the school year to $5.7 million at the end in June 2024.
The school board will vote on the final budget June 6.
