JEFFERSON TWP — The South Butler School District is facing a $1.7 million budget deficit in the 2014-15 school year, but officials are already considering ways to close the gap.

Business affairs director Debbie Brandstetter reviewed the $35.6 million budget with school board members Wednesday night.

With the deficit, she recommended that the board raise the property tax millage rate by 2 mills to 95.275 mills, which would increase funds by about $331,000.

Under the state Act I law, the highest amount South Butler could raise taxes without taking other actions is 2.425 mills.

If members voted to raise taxes by that rate, the remainder of the needed funds to balance the budget could come from the fund balance, Brandstetter said.

To control costs, the district also is eliminating five teachers and a secretary through attrition, considering a potential freeze on administrative salaries and having an outside agency arrange substitute teacher staffing.

Benefit costs are almost $800,000 more than this year, but salaries are down about $580,000 because of the staff cuts being made.

Superintendent Dale Lumley assured board members the cuts would not impact the student-to-teacher ratio. He added that there are 350 fewer students in the district now than 10 years ago.

“This proposed budget has been carefully prepared to reflect current economic conditions and to respond to current reductions in state revenues, along with an increase in mandated contributions to bolster the underfunded Pennsylvania State Employees’ Retirement System,” Lumley said.

Board members should vote on the preliminary budget on Wednesday. A final budget is required to be passed by June 30.