Tamaqua Area administrators told school board members Tuesday that a proposed tax increase in the 2024-25 budget is needed.

The proposed budget with a 3.17 mill tax hike was unveiled last month. The increase in millage is allowed under Act 1 and amounts to $1,155,872 in revenue from real estate taxes, Connie Ligenza, business manager, said in March.

The increase means the average taxpayer will pay about $120 more a year, she said.

The school board opted not to hike taxes in last year’s budget, but chose to forgo the 2.41 mill increase then. The board dipped into the district’s fund balance to make up the lost revenue.

Ligenza provided the board with the fund balance totals for the past 10 years, which peaked at $5.8 million in 2016 and dropped to $2.26 million in 2023. The fund balance sank more than $1 million between 2022 and 2023.

The trend speaks for itself, she told the board during Tuesday’s work session.

“In my opinion, I think it’s time that we move forward with an increase,” Ligenza said.

The district has a decent index under Act. 1, she said, and a countywide reassessment is approaching.

Ligenza explained with a reassessment the market value of the properties that the district collects real estate taxes on might go up five times, but the district’s millage rate will also go down five times to equalize the increase.

“We’re not allowed to establish a windfall,” she said, adding that the district is going to see numerous tax assessment appeals following reassessment, like it did in the late 1990s.

“You’re definitely going to see some erosion on those original numbers,” Ligenza said. “For those reasons, I’m recommending that we consider the increase.”

The administration would also like to use the proposed tax increase to fund a list of facilities, buildings and grounds, and technology upgrades, she said.

The amount needed for facilities is $1,085,000 and technology is $1,247,500, Ligenza said. The administration is asking the board to include $1 million in the current budget supported by the tax increase to fund some of these items as prioritized, she said.

Ligenza pointed out that there was no upcoming vote on the budget this month, but wanted to keep the discussion open as they move forward. The board will vote on a preliminary budget in May, and then a final budget in June.

Nick Boyle, board vice president, who chaired the meeting in absence of Larry Wittig, board president, said the board might not have much of a choice on raising taxes.

However, he didn’t want to get into a situation where they get additional funds, like they did with COVID, and end up with a windfall, Boyle said.

Ligenza pointed out that they don’t know what is going to happen with funding from the state. She and other business managers were advised not to include any of the proposed funding for basic education in their budgets.

She included $1.68 million in basic education funding from the state - half the money that Tamaqua Area would receive under Gov. Josh Shapiro’s budget proposal.

Boyle asked if Tamaqua Area would receive any of the money as a result of the fair funding lawsuit.

Superintendent Ray Kinder said that original projections had the district receiving some money, but there is nothing on the horizon coming to the affected districts yet. The state agreed with the court ruling that the current funding system is flawed, and did not appeal, he said.

“They basically don’t know how to fix it,” Kinder said, adding that that is what state Sen. David Argall and the Senate Education Committee is trying to do right now.

Kinder also pointed out that the board needs to consider funding for positions in areas, such as ESL or special education, as next year will be the last for some grants.

Board member Trina Schellhammer asked if there was any legislation to help districts with charter schools, and Ligenza said that there has been no movement on that.

Kinder said that the administration will for now continue forward with the budget as proposed, which includes the tax increase.