Freeport Area property taxes to increase; amount depends on where you live

Taxes will increase for Freeport Area School District residents next school year — but by how much depends on where you live.

Those living in Buffalo Township will be hit substantially harder than those in Freeport or South Buffalo. That’s because the formula for the way property taxes are calculated in Butler County, where Buffalo Township is located, differs from that of Armstrong County, where Freeport or South Buffalo are located.

The budget, discussed at Thursday’s school board meeting, includes tax increases — technically — that are at 4.5% index limit determined by the state.

However, Butler County real estate owners (Buffalo Township) will pay more than their fellow district real estate owners in Armstrong County (Freeport and South Buffalo) under the state’s formula.

Budget figures provided by Brad Walker, the district’s business manager, show that the actual tax increase in Buffalo Township will be 6.7% while the increase in Freeport and South Buffalo will be 1.68%.

For a house in Buffalo Township with the average assessed value of $19,710, the taxes will rise from the current $3,043 to $3,247 per year. That’s a $204 jump.

A house in Freeport or South Buffalo with the average assessed value of $33,395, now yields $2,201 in taxes. That same property under the proposed increase will carry a tax bill of $2,238. That’s an additional $37.07 in taxes.

The preliminary budget approved by the board in May, was based on no tax increase, but that was prior to the district receiving the final rebalanced numbers from the State Tax Equalization Board. That state board aims to equalize taxes in districts that cross county lines to compensate for the difference in assessed values ​​from one county to another.

Even if the school board elected to not raise taxes, they still would go up for Buffalo Township (Butler County) residents because of the tax equalization process, officials pointed out.

Figures for the no-increase preliminary budget show that Armstrong County millage for Freeport and South Buffalo would have remained at 65.90 mills.

But, Butler County taxes would, have climbed regardless, from 154.4 mills in 2021-22 to 162.01 in 2022-23 an increase of 7.61 mills or 4.92%.

Officials: Not unusual

It’s not an unusual occurrence, however.

Figures provided by Walker showed that from 2017 through 2020-21, when taxes were not increased by the district, they stayed the same in Freeport and South Buffalo from one year to the next. Buffalo Township, in the same years, showed increases of one to three mills.

“It’s been the continuous arc because of all the residential growth we’ve been seeing in Butler County,” Walker said.

Walker said added that makes Buffalo Township real estate owners responsible for about 72% of the local tax burden.

“I think it will level out somewhere,” he said. “We hope in southern Armstrong there will be growth, out in South Buffalo Township.”

School Director Frank Prazenica was perturbed by the situation.

“I just think we should have the right, as a board, to say we want to keep it at 154 mills,” Prazenica said, referring to the current tax rate for Buffalo Township.

“We could do that, but we would be giving money back to Armstrong County then,” Toncini said, noting that taxes would still have to be equalized. And the district’s deficit, currently projected at just over $1 million, would grow.

“Over the past four, going on five years, the district has been taking from the fund balances (to cover deficits),” Walker said. ”We cannot lower the district’s revenue enough to make Butler County’s taxes remain the same due to the state tax equalization process.

“The best outcome the district can have is to keep the millage status quo so that we are not losing revenue due to the state tax equalization process. But it is the state tax equalization process that bumps Butler County’s (millage) up,” he said. “That could float in the other direction next year when the state tax equalization figures come out.”

A closer budget look

The new budget shows nearly an additional $976,000 increase in expenditures.

For the current school year, the budget was nearly $35.2 million while the pending 2022-23 budget amounts to close to $36.2 million .

That difference amounts to a 2.77%. But, in attempting to drive home the point that the district has been exercising financial responsibility, Walker said the Consumer Price Index has increased 8.5% over the past 12 months.

He said that figure includes allocations of $363,000 in the district’s general fund reserve and $300,000 in the capital fund reserve.

Both of those are tied to a badly needed $66 million renovation project for the high school that will be spread out over the coming years.

As for operating expenses, as it is nationwide, Freeport Area is feeling the impact of inflation, he said. A carton of copy paper that costs the district $44 used to be $27.

“That’s like, $14,000 to $15,000, just in paper,” he said. “It would be like a $3,000 increase from last year.”

“Inflation is killing the budget,” Walker said. “We’re being asked to do with more with less. We level-funded the buildings and we are asking our staff to do more with less due to the current operating expenditures.

“Our fixed costs in general are about 88% of the budget so we only have about 12% of wiggle room for everything else.”

He said those fixed costs include debt service, transportation, cyber-charter school payments and labor contracts. Walker said the contracts for all employee groups make up the biggest chunk, at 68%.

He said the district’s administration has taken steps to cut costs. For example, he said the district entered into a five-year contract for copiers that will save $27,000 over the life of the contract.

“We approved a contract with UPMC for athletic trainers and it’s a cost of $30,000 per year,” Walker said. “I can’t tell you how much it is, but the savings is astronomical for athletic trainers. The going rate for athletic trainers when we were shopping around was upwards of $70,000 per year.”

In addition, Walker said the district saved around $900,000 by not replacing six staff positions vacated by retirements.

The final 2022-23 budget will be voted on Thursday.

Leave a Reply

Your email address will not be published.