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Chambersburg school board reviews budget

Preliminary budget calls for property tax increase

Preliminary budget calls for property tax increase

December 20, 2007|By DON AINES

CHAMBERSBURG, Pa. - The Chambersburg Area School District Board of Directors on Wednesday reviewed the preliminary 2008-09 budget, which calls for a property tax increase of 5.57 mills to balance the $98.4 million spending package.

The proposed increase is 1.5 mills above the district's Act 1 index, which would allow a tax increase of 5.3 percent. However, "this budget anticipates that the district will qualify for exemptions equal to $1,834,086, or 2.92 mills," according to the budget summary.

A tax increase exceeding the inflation index set by the state would have to go before voters in next year's April primary, unless a district qualifies for exemptions to raise taxes above the cap. The exemptions are 1.75 mills for the district's construction program and 1.17 mills for special education, according to the summary.

If the full increase is adopted, the tax rate will be 82.48 mills beginning July 1, 2008. That is $82.48 cents for every $1,000 of assessed value on a property. A property with a market value of $100,000 has an assessed value of $9,800, according to Business Manager Rick Vensel.

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How much more property owners will pay next year depends, in part, on whether they have homestead and farmstead exemptions, and how many more people apply for them between now and March. In May, district voters approved an Act 1 tax shift, increasing the earned income tax from 0.5 percent to 1.2 percent in exchange for a reduction in property taxes expected to be about $399 next year, a figure that could go down as more people apply for exemptions between now and March, Vensel said.

Without the exemptions, the tax on a $100,000 property would be about $808, but the homestead exclusion and slot revenues could reduce the tax to about $400, although working families will pay the higher earned income tax.

Local revenues, including property and income taxes, are projected at $64.75 million, with another $30.7 million in state subsidies and $2.95 million in federal funding. With a budgetary reserve of more than $4.2 million, the total budget is expected to be $102,663,792.

On the expenditure side of the ledger, salaries will total about $46.3 million, with health and dental insurance costing $10.7 million. Retirement, workers' compensation and other benefits add about $6.5 million, and debt service next year is $8.2 million, according to district figures.

Overall, the budget increases spending 5.65 percent over this year. Approval of the preliminary budget is set for Jan. 9, after which it must be reviewed by the Pennsylvania Department of Education for Act 1 compliance.

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