Those who pay taxes to South Butler School District will not have to pay any more than they did last year, despite the district's rising expenditures budget.

The South Butler School Board approved the final budget for the 2017-18 fiscal year, which runs from July 1 through June 30, 2018.

The expenditures budget is $37.2 million, about $1.5 million more than the $35.7 million in estimated revenues. The difference of $1.5 million will come from the district's fund balance, which is $7.7 million.

However, the property tax millage will stay at 94.275 mills. A mill generates $1 in tax income for each $1,000 of a property's assessed value.

School district employee salaries and benefits make up a combined 68 percent of the expenditures. Budgeted for salaries is $15.1 million, while benefits are budgeted at $10.1 million.

However, the teachers union and school board have not reached an agreement for their latest contract, which, if put into place, will expire in 2020. The last contract expired in 2014.

This means that the money budgeted for salaries and benefits is based on the school board's proposal to the teachers union. District Superintendent David Zupsic called the money budgeted a “placeholder.”

“We understand it will probably change, but we have to use something,” he said.

He also said he could not speculate how much the budgeted amount could change.

“We have negotiations going on, so could salary change, could the cost of health care change?” Zupsic said. “It's difficult to predict where that would go based on the other components of the contract.”

Zupsic also noted the impact the delayed contract finalization has on the fund balance.

He said that since it's been multiple years without a new contract, which would likely include salary and benefits increases, the amount in the fund balance could be misleading.

“At the end of a fiscal year it looks as if the district is maybe saving money because we never realized those pay increases, so the fund balance can have an artificial (look),” he said. “Overall it looks as if we have more money, but that money has to be reserved for an eventual settlement.”

Zupsic said both sides are “close” to a resolution, with health care and salaries being the main negotiation points.

The bulk of revenues come from property taxes, which are expected to be $15.6 million, or 43.6 percent of the budget. The state's Basic Education Funding program and its Ready to Learn Block Grant are expected to be $8.1 million, or 22.6 percent of revenues.

The district pointed to the state-mandated rise in required contributions to the state's teachers retirement system as one of its main rising costs, according to a press release.

From the 2010-11 fiscal year to 2017-18, the district's annual contribution to the retirement system increased by $2 million. The district expects to pay $2.4 million to the retirement system this year.

The capital projects fund budget is $656,800, including $300,000 to replace a cooling tower at Knoch High School.