JACKSON TWP — The Seneca Valley School Board Monday approved a preliminary budget with a 3.1-mill tax increase.

The 2016-17 spending plan calls for $121.5 million in expenditures, up from $115.5 million for this year.

The board opted for the plan proposed by board Vice President Jim Nickel last week that would use additional money from the district’s fund balance to make a lesser tax increase.

The budget initially proposed by the administration called for a 4.03-mill increase.

Under the preliminary budget, property tax would increase from 119.9 mills to 123 mills.

A mill equals $1 in tax revenue for each $1,000 of a property’s assessed value.

The value of one mill districtwide is expected to be $562,696, an increase from this year’s figure of $548,000.

The tax increase for the owner of a house with a median market value of $228,300 would be $50.

Nickel’s proposal was to use an additional money from fund balance, if necessary, to cover a $750,000 contingency expense line item.

The potential fund balance use for contingency expenses would be a maximum of $373,481.

The district had a projected budget shortfall of $2.6 million, though the board had already planned to use $2.25 million of its fund balance to cover increasing cost of pensions and textbooks. The district’s current unassigned fund balance is $8,250,000.

Expenses are increasing for the district including an increase of $2.75 million for pension plan contributions, $2 million for wages and $345,000 for health care.

The budget will be available for review on the district’s website and the board will vote on final approval in June.