HUGHESVILLE - It's not final until June, but the East Lycoming School Board Tuesday passed a $21.6 million proposed budget that raises real estate taxes on the average parcel valued at $91,000 by about $25 more per year. And that may be the trend in years to come as retirement costs are expected to double by 2018.
Pensions, salaries and health care costs - all of these expenses also hitting municipalities and impacting other school districts across the nation - were among the list of expenses the board was told it must keep an eye on in the near future.
The proposed budget reflects an increase of $493,149 over the current year's budget, said David Maciejewski, business manager, who provided a handout to the public and board to review. It included the present financial situation, a list of proposed capital projects and a forecast.
Currently, the district anticipates a 0.27-mill increase in the 2013-14 proposed budget, with real estate tax at 12.05 mills, earned income at 1.2 percent and real estate transfer tax of .50 percent, the latter two which remain the same.
Salaries are expected to cost an additional $300,000; health insurance, $30,000, because of employee replacements and retirees; the state school retirement system will cost $261,000, if the rate is maintained as proposed by Gov. Tom Corbett; and other expenses include a capital project reserve fund of $150,000, which could be transferred to cover retirement costs and a reserve of $272,000 is in anticipation of increased retirement costs.
The budget is expected to be adopted by June 30.
In a forecast that looked through to 2018, Maciejewski said anticipated health insurance increases of about 7.5 percent and state school retirement system rate increases that go from 14.6 percent of payroll to 28.6 percent of payroll have been planned for over the past seven years.
The projection is for taxpayers to see at least a 2-percent real estate tax rate increase through these years, which is equal to a $25 increase per year on an average real estate parcel.
The doubling of the retirement rate, however, will impact the budget locally by $1.2 million, he said.
Maciejewski explained how the board and administration have done their due diligence in preparing for cost overages anticipated, but he said there are areas to be cautious.
"As we look ahead, we must be cognizant of health insurance and retirements and the impact they have on wages," he said.
However, with employee contracts not in place for this period of time, and there is potential for staff turnover and retirement, he added, the forecast reflects minor salary and wage adjustments, but accounts for the benefit increases.
Local revenue, meanwhile, is expected to grow slowly and state revenue is, too, by about 3.5 percent per year due mainly to retirement and basic education subsidy.
The district's next capital projects plan in the works is a pool conversion to a multi-purpose field house, a project estimated, after adjustments, at $750,000, that can be funded internally without outside sources of revenue.
It also wants to enhance the security at the Joseph P. Ashkar Elementary School, at a cost of $200,000.
Additional projects for next year include selected roof recoating at various schools and driver education and truck replacements.