New Castle hopes to hold line on school tax

May 25, 2006

By Pat Litowitz
New Castle News

Without hefty handouts from the state, New Castle could not afford its own school system.

That’s a reality the district faces annually as officials secure funds without overtaxing city property owners. When the school board approves the budget for the 2006-07 year on June 21, the district’s tax rate is expected to remain at 17.27 mills.

Following a policy of aggressive fiscal oversight, district business manager Joseph Ambrosini is confident the tax rate will remain stable for several years. No promises, Ambrosini said, but the outlook is good.

“The district was adamant it was not going to raise taxes.” he said. “We looked at (controlling) staffing and expenses.

“A (zero)-millage increase doesn’t happen unless your district is dedicated to that goal.”

State funding of $25 million will account for more than 60 percent of the district’s revenue in 2006-07. Local taxes will generate $11.6 million, while the federal government provides $3.3 million in aid.

For every dollar the district spends, the state will contribute 62 cents. City property owners will be charged 29 cents. The feds will toss in their 8 to 9 cents worth.

The school district projects spending $35.8 million in the next school year. That’s a jump of $1.6 million from the current year.

Ambrosini said the 4.6-percent budget growth is fueled by five factors: debt repayment on the new junior-senior high school, salary and retirement increases, escalating utility costs and cyber school tuition.

A $900,000 boost in state funding and better-than-expected investment results will address a majority of the increase. The district will transfer $300,000 from its general fund to balance the budget.

Thus, the district can avoid a tax hike.

City residents Erick Rosenholm Jr. and Beverly Diana appreciate Ambrosini’s news. But they want to see their rates reduced.

Rosenholm, a Rose Avenue resident, and Diana, who lives on Beckford Street, have been city residents for more than 50 years. Each pays approximately $1,000 annually in school taxes.

They witnessed their tax obligations rise, the erosion of the city’s industrial base and the aging of New Castle’s population.

“The school tax is going to be rough for me to pay,” said Diana, a recent widower. “It’s hard.”

Rosenholm put his two children through the school system. He values the education the district provided but wonders how much longer he can afford to support the city schools.

“I know there is a lot of senior citizens,” he said. “I think they should get a discount.”

Tax relief is available but limited. The state’s property tax/rent rebate program provides up to $500 annually to qualified seniors and permanently disabled citizens. With a $15,000 household income ceiling, the rebate is difficult to secure.

Act 72 legislation, which promotes statewide property tax savings through legalized gaming, has yet to be realized. While slot machine licenses are being awarded, the facilities have yet to open.

The state will then need to collect $900 million before the benefits can be enacted. Act 72 funds will not provide direct rebates to property owners but rather reduce the amount of their tax obligations.

The first distribution of funds is expected by the 2007-08 school year.