Taxes stay same in North Allegheny’s proposed final budget

North Allegheny School District aims to keep its real estate tax rate at 19.74 mills, despite rising salaries and a slow growth rate.

The approximately $198 million proposed final budget was unanimously approved on April 24 by the school board and is open for public review before a June 12 vote on the final budget for 2024-25, which would mark the third year in a row at the current tax rate.

Expenditures in the proposed final budget are more than $5.5 million over the 2023-24 budget, according to a presentation to the board by Kermit Houser, the school district’s director of finance.

NA’s real estate tax rate of 19.74 mills is the sixth-lowest among school districts in Allegheny County for 2023-2024. By comparison, Pine-Richland is at 19.58 mills; Fox Chapel, 20.73; Bethel Park, 24.58; Mt. Lebanon, 27.59; and Upper St. Clair, 29.6339.

A primary driver of expenditures is funding staff salaries and benefits, which make up approximately 75% of the budget, Houser said. The district assumes a 5% increase in benefits for 2024-25.

Salaries are proposed at over $92.7 million, or $3.154 million more than 2023-2024 fiscal year salaries, according to the budget presentation. Salaries are based on current overall staff expectations, but the number could change during the year because of retirements, leaves of absences, sabbaticals or fluctuations in student enrollment, Houser said.

Other increases for the coming year include funding for third-party transportation contractor carrier rates, according to House.

“That’s primarily due to the costs that we’re seeing this year,” he said, citing “macro issues” that affect not only at North Allegheny, but school districts regionally and nationally.

Required employer contribution to the Public School Employees Retirement System continues to be a significant annual cost. While the statewide contribution rate as a percentage of payroll dropped slightly for 2024-25, from 34% to 33.9%, it is expected to increase through the mid-2030s, Houser said.

The district sets aside money for PSERS contributions in an assigned fund. The state reimburses school districts for a portion of those costs.

Elizabeth Warner, North Allegheny School Board president, said she was pleased to see that the budget included the ongoing cost increase of PSERS.

“I’m not happy about paying that, but I think it’s important that none of us forget about what a huge expense that is for the district,” she said. “It’s just not going away. It’s just something that we have to deal with.”

On the revenue side, the school district generates about 75% from local sources, most notably real estate taxes. According to Houser’s report, the average district residential assessed property value is $251,266.

Overall, the district’s assessed value is estimated at $6.5 billion, taking into consideration a growth rate of .02%.

“That is very low compared to prior years. It’s basically flat,” Houser said, attributing the circumstance to assessment appeals and Allegheny County’s common-level ratio dropping from 63.6% in 2023 to 54.5% this year.

The common-level ratio measures how a county’s base year assessments compare with current real estate market valuations, according to the Pennsylvania Department of Community and Economic Development.

The low growth rate is a previous number based on certified assessed value listings by the county. The exact percentage will be available from the county in May, Houser said.

Positive outlooks in the budget include elevated interest rates on investments that should extend into next year, he said.

The state contributes 23% of North Allegheny’s revenue, with basic education funding expected at $13.2 million and special education funding at $4.5 million. Pennsylvania’s budget is approved after North Allegheny’s, so the exact number is yet to be determined.

School districts also are provided with a transportation subsidy from the state. Federal funding accounts for about 2% of revenues.

The district’s projected fund balance as of June 30, 2025, is more than $28 million. Warner said the balance can be thought of as similar to a household’s savings account. The amount includes a projected $12.2 million assigned for PSERS and debt obligations.

Warner said that while North Allegheny has better bond ratings than nearby school districts, it could improve, which in turn could result in better interests rates when the district borrows money for projects.

Board member Richard McClure noted the “remarkable” work of the finance team and ability to keep the tax rate steady, even with the added cost of a new North Allegheny police department.

Superintendent Brendan Hyland further acknowledged the finance department’s work, commenting on the stringent process and the importance of being “fiscally responsible” for taxpayers.

“Making sure that we present a balanced budget per law to our community so that they have an opportunity to review, look at and understand how we come up with that budget is extremely important,” Hyland said.

The proposed final budget for 2024-25 can be found on the North Allegheny School District website and is on display at local municipalities, school district buildings and Northland Public Library in McCandless.