Fox Chapel Area School Board pledges to keep any potential tax hike for 2025-26 within state limits

Fox Chapel Area School District officials have pledged to keep any potential real estate tax hike for the 2025-26 school year to 4% or less.

The board voted 8-0 on Jan. 13 to pass a resolution to hold the line on taxes to the Act 1 index — a state formula based on the inflation rate that limits property tax hikes without requiring voters’ approval.

Board member Katie Findley was absent.

The district’s index restriction is 4%. The current tax rate is 21.5128 mills. A hike to the index would equate to about 0.86-mill.

It means property tax payments would go up $86 per $100,000 in assessed value.

Tax increases were capped at 5.3% for this school year. But the district passed its $119.5 million budget for 2024-25 with a 3.75% hike, after raising taxes in 2023-24 by 1.5%.

One mill generates about $3.7 million in revenue for the district.

The resolution vote is the first school board step in the budgeting process.

By the end of January, school districts are required to pass a resolution proclaiming to stay within index parameters, or submit a proposed preliminary budget with a proposed tax hike to the state Department of Education, according to state guidelines.

Eric Hamilton, board member and finance committee chairman, said he could not recall any time Fox Chapel Area has raised taxes beyond state limitations.

“This is a normal first step in the budget process,” Hamilton said on Jan. 13. “It kicks off the budget planning process for the board for the next fiscal year.”

The next board votes regarding the 2025-26 budget are expected to take place in May when the preliminary budget is approved.

Districts must pass their final budgets by the end of June.

District business manager Kim Pawlishak said it’s too early to speculate on real estate taxes as the administration is currently reviewing requests from its various schools and departments.

“Requested budgets were all completed and due prior to the winter break,” Pawlishak said. “We are compiling that. We’ve pulled it together. … We’re going to go over what is a ‘need,’ what is a ‘want’ and move forward with our planning process.”

Superintendent Mary Catherine Reljac said there are various unknowns at this point that will impact the new budget.

Unknowns include state budget figures and projected enrollment, staffing projections and health care costs for next school year.

“It’s still early,” Reljac said. “There’s a lot that will come in the next few months.”

Good financial standing

One thing that might stave off any major tax hikes is the district being in good financial standing, according to a report from auditor Hosack Specht Muetzel & Wood.

Managing partner Peter J. Vancheri went over some highlights of the 95-page report on Jan. 13.

The presentation begins around the 33-minute mark of the school board meeting video posted on the district’s YouTube channel.

Vancheri said the district’s fund balance, also known as reserve funds, was about $30.64 million, including about $6.82 million in committed reserves for pensions and nearly $10 million in unassigned funds.

Districts have been known to use unassigned fund balances to cover emergency repairs and address budgetary shortfalls.

Fox Chapel Area revenues has about $10.24 million in its capital projects fund.

District revenues came in at about $116 million and expenses were $111.5 million, a surplus of about $4.5 million.

Vancheri’s report indicated about $2.475 million of that was transferred to capital projects and the rest was moved to reserves.

He said there were no surprises when reviewing district documents and the auditing process went smoothly.

The full report is available under the finance section of the district’s website.

Hosack Specht Muetzel & Wood has been the district’s auditor for many years. Annual audits are a state requirement.

“They do a good job of providing a check on our controls and that our financial statements are accurate,” Hamilton said.