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Tamaqua Area tax hike blamed on pension issues

A school property tax increase is likely next year for residents of Tamaqua Area School District.

At a workshop meeting this week, members of the school board and district administrators discussed the tentative 2014-15 budget and its $2.2 million shortfall, which will be overcome, in part, with $2.2 million from the district fund balance.

The plan that will be presented to the board for a vote on Tuesday will also include a 0.93-mill tax increase.

Board President Larry Wittig said the biggest financial problem for Tamaqua Area and every other public school district across the commonwealth is the escalating cost of state-defined mandatory payments to the Public School Employees Retirement System (PSERS).

According to the PSERS schedule, public school districts were required to contribute an amount equal to 16 percent of employees' salaries in the 2013-14 school year.

Next year, the mandatory contribution increases to 21 percent of employees' salaries. In the 2015-16 school term, the contribution rises to 24 percent. And the following year, the mandatory contribution is 29 percent.

"This tax increase isn't going to solve anything," Wittig said.

"If this was a budgetary crisis that we could solve, then I'd be all for it. If a tax increase would solve budget issues for the next three or four years, I'd be all for it. But this isn't going to solve the PSERS problem."

According to district Business Manager Connie Ligenza, a 0.93-mill tax increase would add about $37 to the annual tax bill for the average property owner and would generate approximately $274,000 for the district budget.

The last tax increase for district property owners came in the 2010-11 budget with a 1.25-mill hike.

Director Daniel Schoener said he agrees with Wittig's sentiments concerning PSERS and the futility of raising taxes to pay the unaffordable contribution schedule. But the proposed modest increase would help the district pay for local-level costs, such as employee wage increases, Schoener said.

"The PSERS problem is happening all across the state. Hopefully, the state will resolve the problem because it will shut the whole state down if they don't. But this tax increase will help us with expenses that we can control, like the cost of contracts," Schoener said.

Wittig stood his ground.

"My feeling is, you raise taxes to solve a problem. As far as this tax increase is concerned, it solves nothing," he said.

When the budget is presented to the full board for a vote next week, Wittig said his vote will not be in favor.

The board meets Tuesday 7:30 p.m. at the middle school multi-purpose room.

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