MERCERSBURG, Pa. — The Tuscarora School Board on Monday approved a $33 million budget that makes no significant changes to operations, but includes a property tax hike to combat increased contributions to the state pension system.
The school board approved a 2-mill tax increase that will cost the average homeowner an additional $37 a year.
Tuscarora Business Manager Eric Holtzman said the majority of the tax increase is needed for payments into the Public School Employees’ Retirement System, commonly referred to as PSERS. Pennsylvania school districts will be contributing 12.36 percent of their payroll into the system in 2012-13.
The projected employer contribution rates stay above 27 percent from 2018-19 to 2034-35.
“We’re dealing with insanity,” school board member Larry Funk said of the retirement system obligations.
Holtzman said the tax increase also has ties to construction projects at Mercersburg Elementary School and the Franklin County (Pa.) Career and Technology Center. The state reneged on $70,000 in reimbursements for those two projects, he said.
Each mill of taxes brings in about $145,000 in revenue for the district. The total tax rate will now be 109.19 mills.
A mill represents $1 of every $1,000 of a property’s assessed value.
The teachers will not experience salary increases for 2012-13 or “step” movement on their pay scale, Holtzman said. Steps on the pay scale are generally based on number of years teaching.
Staffing levels will remain consistent, Holtzman said.
“Last year, we cut 20 positions,” he said.
Board President Clifford Smith Jr. said it is wrong to blame teachers and other public employees for problems with PSERS.
“It is the fact the regents of the state pension system made some dramatic mistakes, I think, in investments,” Smith said.
Holtzman said owner-occupied homesteads and farmsteads are eligible for $126 in property tax exemptions from the state for the coming year.
In other business, the school board decided to sell its district office building on East Seminary Street to Twine Construction for $175,000.
The Tuscarora School District serves students and residents in Mercersburg and the surrounding townships.