The Keystone School Board earlier this week approved a 1-mill real estate tax increase, looking to keep ahead of underway projects and pending heating repairs.
The increase takes the district’s real estate tax to 52.587 mills, meaning a property owner will pay $52.59 on each $1,000 of assessed value.
The increase will generate about $67,000 in additional revenue for the district.
At the heart of the tax discussion are a window replacement project and a heating and air-conditioning project.
Also, the boiler heating system at the high school, while currently providing heat, is expected to become non-serviceable in the next three to four years.
And while the district is still under contracts for electricity and natural gas service at favorable rates until 2025, board members agreed those favorable rates will increase significantly.
“We’re going to get hit,” said Ken Swartfager. “As soon as those contracts run out, we’re going to get hit hard.”
In recent months electrical service, gas lines and the fire alarm system at the elementary school all came in need of unexpected replacement with costs for all of the work running nearly $250,000.
The district was able to pay for those unexpected costs from its capital reserve fund.
With the other projects pending, board members agreed they don’t want to drain the capital reserve fund to a level that wouldn’t cover another unexpected emergency expense.
Slagle, who traditionally makes the annual motion on real estate taxes, made the motion to increase the tax rate by 1 mill.
“We’ll go 1 mill for this year,” he suggested. “We’ll go one year at a time. But really, (1 mill) is only a drop in the bucket. But it would be a disservice to the district if we don’t do a tax increase of some kind.”
Say asked about the high school boilers, noting the three to four years of estimated remaining serviceability.
“I think we all agree it’s a rough time to raise taxes.” he said.
Dustin Swartfager said the three to four years for the boilers is a guess.
“Hopefully, maybe,” Dustin Swartfager said of the boilers’ life. “But it’s going to be a big hit when it comes.”
Estimated costs of the boiler replacement at today’s prices have been $650,000 to $800,000.
Say said he doesn’t favor the year-to-year approach and asked that a five-year plan be developed for consideration.
Board members noted this year’s homestead/farmstead tax rebate will be about $40 higher for each qualifying property, an amount about equal to the amount of the tax increase for the average homeowner in the district.
Each qualifying homestead/farmstead property owner will be credited about $180 against their 2022-23 tax bill. The district will receive $352,390 in tax relief this year. That payment was $279,590 last year. That’s an increase of $72,800 slightly more than the tax increase will take out of property owners’ pockets.
The homestead/farmstead exemption is a deduction from a property owners’ real estate tax bill funded by gaming taxes levied on casinos in Pennsylvania.
The district also imposes a 300-mill occupation tax, an arbitrary tax based solely on a person’s job title with assessed values that can be decades old.
Other taxes include a $10 per capita tax, a one-half of 1% realty transfer tax and a one-half of 1% earned income tax.
In a related move, the board gave its final approval to a $17.5 million 2022-23 budget. The final budget must be filed with the state Department of Education by June 30, though there is no guarantee the state Republican-controlled legislature and Democratic Gov. Tom Wolf will meet a mandated deadline for a state budget that funds a large portion of the district budget by that date.