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Property tax rate might hit 6.24 mills in Chambersburg

June 03, 2007|By DON AINES

CHAMBERSBURG, Pa. - Property taxes could be increasing more than originally called for in the 2007-08 Chambersburg Area School District budget, with the board considering adding an additional mill to create a technology reserve fund and replace the per-capita tax.

The board voted unanimously at Wednesday's meeting to instruct the administration to include 0.5 mills for the technology reserve and 0.51 mills to replace the per-capita tax in the final budget to be voted on June 13, said Rick Vensel, business manager for the school district. There will be a 7 p.m. public hearing prior to final passage.

If those changes are included in the final budget, the tax increase will go from 5.23 mills in the preliminary budget to 6.24 mills for next year. That would make the real estate tax rate 76.92 mills, or $72.92 for every $1,000 of assessed value on a property.

The per-capita tax of $10 on adults in the district was projected to raise about $308,000 next year, Vensel said. One mill of real estate tax is expected to generate about $606,000, according to the budget.

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"On the per-capita tax, the cost of collection versus revenue is prohibitive," Vensel said. Bills have to be printed and mailed, and it costs money to collect delinquent taxes, he said. Keeping the tax rolls updated as people move in or out of the district, die or come of age also is a problem, he said.

The advantages to eliminating the per-capita tax and replacing the lost revenue by raising the real estate tax is that it will eliminate the billing cost and the tax will be more broadly applied, Vensel said. Instead of taxing individuals, the tax will be applied to all commercial, residential and industrial properties, he said.

The 0.5 mills for the technology reserve fund also will bring in more than $300,000, Vensel said.

"What we need is to build a reserve for future replacement of equipment," Vensel said. "Technology is a consumable," and equipment such as computers are outdated or worn out in three to four years, he said.

The additional tax increase still leaves the district under the Act 1 cap set by the state, but not by much, Vensel said. The proposed final budget is 0.13 mills below the cap, he said.

Under Act 1, school district budgets that propose a tax increase above an inflationary index set by the state are subject to voter approval in a referendum. The preliminary budget voted on earlier this year by the board was below that cap, and did not have to be put before voters in the May 15 primary.

In the primary, district voters narrowly approved a referendum to increase earned income taxes from 0.5 percent to 1.2 percent, the only district in Franklin County to do so. In exchange, homeowners will get a homestead exclusion lowering their property taxes by $367.

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