HERMITAGE – Owners of property in Hermitage will see their school taxes increase by 4.4% under the Hermitage School District’s 2022-23 operating budget. School officials blame tax reassessments and inflationary costs as the main culprits.
The Hermitage school board approved the 2022-23 budget Monday in a 6-to-2 vote. Board members Keith Fustos and Andrew Bucci voted against the budget, while board member Nichole Hamelly was absent.
The budget calls for total expenditures of $ 36,310,760, and total revenues of $ 35,103,407 for the 2022-23 school year.
The property tax rate of 63.907 mils will be increased by 2.8 mils, or 4.4%. For the median home with a homestead exemption, their annual property taxes will increase by $ 40.40, according to school documents.
Taxpayers also pay a half-percent tax on earned income, which will not change in the new budget. Hermitage property owners also pay separate taxes to the city and to Mercer County.
Superintendent Dr. Dan Bell said the biggest factor in deciding to raise taxes was a series of tax reassessments involving some of Hermitage’s largest commercial properties over the past four years.
The three latest reassessments involved properties owned by Hermitage Commons Retail Associates LLC, Lindy Paving LLC and the Shenango Valley Mall property, although other properties, including the Hermitage Walmart, have also been reassessed downward in recent years.
The property tax reductions over the past four years resulted in a revenue loss of $ 557,804 to the school district in 2022-23, which shifts the tax burden from commercial properties onto residential properties, school documents state.
“Those are our drivers,” Bell said of the tax reassessments. “Were it not for the tax reductions of our large commercial properties, we would likely not have requested a millage increase at the board meeting.”
Prior to this latest budget, the school district’s last tax increase was in 2018. From 2008 to the present, the district’s millage increased less than one percent per year, including this latest increase, school documents state.
Aside from the revenue loss caused by tax reassessments, inflationary pressures are expected to cause a $ 700,000 increase in the cost of diesel fuel for school buses and a $ 200,000 increase in electricity costs for the 2022-23 school year, school documents state.
Although he would have preferred to not raise taxes, school board President Tom Kizak said the increased tax revenue was necessary due to the rising costs of inflation and the tax reassessments, along with other factors.
The electricity consortium that included Hermitage and other school districts recently went bankrupt, which will raise energy costs until the district can find another consortium, Kizak said.
Reducing staffing is also not an option since the district is already “bare bones” as is. However, Kizak added that he appreciated the school staff’s efforts at both making do and trying to budget prior to the passage of the state’s budget.
“I think they do a great job,” Kizak said of the staff. “Every year they have the guessing game and projections on what the state’s giving the school district, and there’s no finality before we have to pass our budget.”
Bucci said he voted against the tax increase because he was concerned about raising taxes on families and residents who are themselves dealing with increases to costs of living, and must now contend with increased taxes.
“Gas is going up, food is going up, and inflation isn’t going down anytime soon,” Bucci said. “My concern is, if the cost of living is high now, where will we be next year?”
No major renovation projects or technology purchases are budgeted for this school year. An upcoming project by the city of Hermitage to renovate the road connecting the elementary campus and state Route 18 will not affect the school’s budget, Bell said.
Although things were more “normal” compared to previous years’ uncertainties regarding the COVID-19 pandemic, the usual unknown of passing a school district budget before the state’s budget is completed remained this year.
School Business Manager Monique Horvath said the district’s budget estimated about 37.44 percent of revenues would come from the state, despite no official indication from state officials yet.
Bell said the arrangement remains a “frustrating point” for officials from local school districts.
“State funding is a considerable part of our budget, yet the school district is asked to follow a budget timeline without any specific guidance from the state,” Bell said.
The student body continues to remain between 2,000 and 2,200 kids, which has been the average for the district over the past decade. The district’s one-to-one technology initiative will continue, with kindergarteners using iPads while grades two through 12 use Chromebooks.
Despite the increased familiarity among staff and students with the technology, Bell said the district will continue to make up days for closures such as snow days instead of using remote instruction, based on feedback from teachers and students.
“A fully online day is not as effective as an in-person day,” Bell said.
District officials will use some ESSER funds, or Elementary and Secondary School Emergency Relief, to organize a summer program to address gaps caused by remote learning or quarantines during the COVID-19 pandemic, particularly in the areas of math and reading.
The remedial program will be folded into the annual summer academy, which is organized between the school and city officials.
Despite disagreements over the tax millage, there was one thing school officials and board members agreed upon – the necessity for a county-wide tax reassessment.
Mercer County’s last county-wide tax reassessment was half a century ago in 1970-72. A common-level ratio, based on a state formula, is applied to modern construction and developments to convert them to those dated values.
A higher common-level ratio usually denotes a lower property value and the ratio has continued to increase over the years, from 2.4 several years ago to 6 in 2020. The modern value of a new building would be divided by 6 this year to calculate the assessment in 1970s values.
County officials previously said the entire process could cost up to $ 6 million and take two to three years to complete.
Both Bell and Kizak said tax reassessments throughout Hermitage have continuously affected the school district’s funding and that a new county-wide reassessment would help resolve the issue, while Bucci said a reassessment needs to be done sooner rather than later.
“I think we need to have it now – it’s not a maybe,” Bucci said.
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