School districts across Pennsylvania are in the midst of budget season for next school year and many are opting to raise taxes as costs increase.
Preliminary budgets from districts across the Pittsburgh region show health care costs are up across the board, as are expenses related to transportation and charter school tuition.
This fall marks the first school year districts nationwide won’t be able to rely on federal pandemic aid that often served as a buffer; while schools had to spend 20% of those funds to help students recover academically, they were otherwise permitted to use it to fill funding gaps, pay salaries and create new programs.
That funding, however, expires this fall. According to the Pennsylvania School Board Association’s latest State of Education report, nearly 66% of district leaders surveyed now anticipate raising local taxes.
The strain from assessment appeals extends into the suburbs
For months, Pittsburgh Public Schools has sounded alarms about another budget stressor: the cascading effects of property tax reassessments. The district is on the hook for millions of dollars in tax refunds as a result of property assessment appeals and last month filed a lawsuit in hopes of compelling a court-ordered countywide reassessment.
But while a majority of property tax losses have hit the city, surrounding municipalities aren’t immune. TribLive reported last month that Allegheny County has lost $1.4 billion in property values due to appeals of 2022 and 2023 property tax assessments through the end of March.
Of that, $570 million in property value has been lost outside of the City of Pittsburgh. That’s created a strain on next year’s school budgets, even in suburban districts with some of the highest property values in Allegheny County.
For Fox Chapel Area School District, assessment appeals have resulted in an $800,000 reduction in local tax revenue. According to a budget presentation earlier this month, the district must pay roughly the same amount in tax refunds.
Nearby Pine-Richland is expected to refund taxpayers $1.1 million due to recent property tax reassessments, leading administrators to budget $740,000 more in 2024-2025 for these kinds of payments.
“It’s both parts of the equation: it’s suppressing revenue and increasing expenditure,” Pine-Richland superintendent Brian Miller told board members last week.
Without implementing a tax increase, the district could face a $7.5 million budget deficit next school year.
Reduced revenues mean less of a buffer to weather unexpected costs
Meanwhile, in the South Hills, Mt. Lebanon’s school board is slated to refund $231,639 to Galleria of Mt. Lebanon, a shopping mall. As of April 30, the district owed more than $1.1 million in tax refunds overall for the 2023-2024 year.
Administrators at Mt. Lebanon — the third-largest school district in Allegheny County by enrollment and one of the wealthiest — have cited increasing healthcare and transportation costs as mounting sources of budget pressure.
The district has also seen its reserves drop sharply over the past few years, from close to $15 million in 2019 to about $3 million this year. That has left the district with less of a buffer to weather unexpected expenses, such as overspending.
Mt. Lebanon spent more than what school board members had approved two years in a row, according to a January presentation. For the 2022-2023 school year, the district overspent by $4.7 million, or 4% more than it had budgeted.
Administrators credited the late hiring of several elementary school teachers for the change, as well as unexpected costs for certain contracted services.
This school year, the district is projected to spend around $1.1 million more than it budgeted, largely because of underfunded salaries and charter tuition costs.
Mt. Lebanon superintendent Melissa Friez said the district worked exhaustively to get that figure there. In mid-March, the district was originally projected to be $1.9 million over budget.
“Everyone has pitched in, including teachers, to help us to get to this point,” Friez said this week. “And we're very, very thankful for that.”
Up until this week, school board members were facing a dire situation, with a resolution to furlough more than a dozen teachers on the table. As recently as April, administrators had stated that doing so — while a last resort — would save the district a necessary $1.8 million, or risk depleting the fund balance entirely by the 2025-2026 school year.
During Monday’s school board meeting, Friez cited a slew of measures implemented to balance the budget without furloughs: reducing the number of positions through attrition and reassigning several classroom aides to other open roles, as well as delaying certain curriculum changes.
To shore up revenues further, the school board will vote next week on a budget proposal with a tax increase of 6.2%, or the maximum amount by which the district can legally raise taxes without voter approval.
If passed, homes at the median property value of $190,000 would see taxes increase by around $340 annually to help balance the district’s budget.
A “complete overhaul” of how Mt. Lebanon conducts its business
While a couple of parents present at Monday’s school board meeting raised concerns about how the classroom aide reassignments could affect special education students, Friez asserted that beyond a slight reduction in foreign language class time at the elementary level, students shouldn’t feel any changes.
Friez — who was hired to helm the district in July 2023 — also said the district has implemented new safeguards to prevent further overspending, including a multi-layer approval system for purchases, as well as a regular review of all vacant positions.
“There is complete, down-to-the-penny transparency on this, so we shouldn’t ever find ourselves in this position again because this had been a complete overhaul of the way that the district conducts its financial business — it’s been a needed overhaul,” said board member Jacob Wyland.
Whether measures like those Friez cited were in place before this year is unclear. The superintendent said in March she had opened a “detailed investigation” to understand how the district overspent its budgets by millions of dollars, but declined to provide further information about what systems were reviewed.
WESA sent multiple interview requests to former superintendent Timothy Steinhauer, as well as former business manager Rob Geletko, but did not hear back.
Steinhauer retired last year after 14 years as the district’s superintendent. The school board approved a confidential separation agreement with Geletko in March.
That same month, Mt. Lebanon brought in a veteran business manager — former Pittsburgh Public Schools chief financial officer Peter Camarda — to oversee financial business in the meantime.
