The South Williamsport Area School Board on Tuesday night passed a budget for 2013-14 that raises property taxes to 13.9 mills, a 4.5 percent increase from this past year's rate.
The 0.6 mill increase means the owner of a home assessed at $100,000 will pay $60 more in school taxes next year.
The new budget, which exceeds $16 million, was approved with a $248,065 deficit.
"We know we typically come in under expenses in some categories," Superintendent Dr. Mark Stamm told the board. "If we don't keep in at budget time an amount for legal expenses, for example, and then we need that money that will put us in a little bit of trouble."
Stamm explained that if the district does need to spend up to the projected budget, it can take $100,000 out of a fund earmarked to cover anticipated increases in the district's contributions to the public school employees' retirement system (PSERS) and then cover any further expenses out of the general fund.
"So basically we're starting the operating year at a deficit and if we need to draw from these funds we will," board member Sam Burch said. "Is there any penalty from moving those funds from the (PSERS reserve) now, and then moving them back if we don't need them later? I don't like passing a budget with a deficit."
Stamm told Burch that the administration had discussed that option and decided that drawing down on the reserve fund without increasing the tax millage will leave the district in a bind in the future.
"Over half the school districts in the state are passing budgets like this right now," Business Manager Denny Artley said. "We've been able to put it off a couple years."
The board voted 5-1 to pass the budget, with Burch dissenting, Gregg Anthony participating via telephone, and John Engel, Mary Ann Cowden and Sue Davenport absent.
The board also unanimously approved putting $200,000 in the PSERS reserve fund, which gives it a balance of $1.3 million.
The board next meets on July 15.