Residents in Seneca Valley School District could be paying more in property taxes next school year as the school board Monday night approved the 2017-18 preliminary budget.

The $131 million budget includes a 3.5-mill increase, or a 2.85 percent tax increase, over the current budget. The vote was 6-0 with school directors Eric DiTullio, Timothy Hester and James Welsh absent.

The new tax rate would be 126.50 mills and would bring in about $73 million for the district. The gross value of a mill is $596,500, an estimated increase of about $13,821 over the current budget.

A mill generates $1 in tax income for each $1,000 of a property's assessed value.

The millage rate increase would generate about $2 million more for the district in 2017-18 and the increased value of a mill will bring in $1.7 million extra. The district will also gain $3.7 million from new real estate revenue.

The proposed tax increase would cost a homeowner with a house valued at $222,000, the median value in the school district, about $85 more next school year in their tax bill.

Expenditures are set just under $127 million, a 4.5-percent increase over the current budget. Revenue is expected to be about $125 million, a 5-percent increase over the current budget.

“Obviously I'm using information available to us at this time for state subsidies. That's probably the biggest volatile item in this budget,” said Lynn Burtner, district business manager.

The district is committing $2 million from the fund balance to offset increasing public school employees' retirement system costs and to fund capital projects.

While the tax increase exceeded the Act 1 index of 2.5 percent set forth for the district by the state department of education, school directors expressed their satisfaction with the budget during discussion before the vote. School board President Jim Nickel said he is concerned with the retirement system and health care costs, as well as construction projects needed in the district, but felt that the district was planning well for the future.

The budget also includes a $4.25 million transfer from the fund balance to a special capital reserve fund to be used for future construction and capital projects, said Burtner.

“I believe this is a good budget for Seneca Valley School District and a representative budget for the people that pay taxes in this district,” Nickel said.

School director Fred Peterson wanted to make sure residents could see beyond the tax increase and see the return on investment they are getting with the quality of Seneca Valley's programs.

The 2017-18 proposed budget includes a decrease in health care costs by $145,000. The technology equipment budget was increased to cover the expanded One-to-One program, wages increased by $2.74 million, and the district's PSERS contribution increased from 30 percent to 32.5 percent, which is about $2.1 million.

About $89 million of the district's revenue is expected to come from local sources, $35 million from the state and $319,000 from federal sources.

The school board will vote on the final budget on June 12.