BUFFALO TWP — Under Freeport School District’s proposed 2016-17 budget of $30.2 million, township residents face an annual $161 increase in property taxes.

The school board Thursday approved the proposed budget, so it could be advertised before approval of the final budget June 9.

District business manager Ryan Manzer stressed there would be changes to the budget before it’s finalized.

“I’m going to do a lot of work before now and then,” Manzer said.

Due to the district being situated in Butler and Armstrong counties, Freeport applies a quirky state formula that sets different tax rates for municipalities in each.

The proposed budget increases taxes for Buffalo residents 7.9 mills, or 5.9 percent, pushing the total from 134.7 mills to 142.6 mills.

Manzer said that jump would amount to $161 more annually or $13 more monthly for the average property owner.

The median assessed value for Buffalo properties is $20,355.

Taxes in Freeport and South Buffalo Township would see a 2.4-mill hike, or 4.1 percent, elevating the tax rate from 58.8 mills to 61.2 mills.

Manzer said that equates to an average increase of $78 annually or $6 monthly.

The median assessed value for Armstrong properties is $32,388.

For Butler County, the total assessed value is $71.2 million while the market value is $506 million.

“The market value is growing faster than the assessed value,” Manzer said.

The total assessed value of Armstrong property is $76.9 million while the market value is $234.4 million.

Manzer said the district is permitted to exceed the state’s 3.2 percent index this year due to expenses incurred for special education and pensions.

According to Manzer, the district would generate $570,000 by sticking to the index, but going above the cap would garner $808,000.

The cap for mills under the index is 60.7 mills from Armstrong municipalities and 140.2 mills for Buffalo.

Manzer said the district is receiving payments, including the last $900,000 one, from the state despite its recent budget issues.

“It’s on schedule,” he said.

But Manzer said the district still is waiting for building project reimbursement from the state.

School board president Dan Lucovich said in an interview the district is owed roughly $4 million for new construction.

Lucovich said that reimbursement could lower the proposed tax hike.

Revenue under the proposed budget only amounts to $28.6 million.

Lucovich said there still is a $1.6 million gap between revenue and expenses with the proposed tax hike, so reserves would be needed to finish the job.

However, Lucovich stressed the current numbers are only what is proposed to the board.

During the presentation, Manzer reiterated the budget numbers aren’t final.

“It’s a working document,” he said.

The proposed budget is an increase from this year’s budget of $28.6 million.

The largest increases are $758,000 for state-mandated pensions, $626,000 for staff salaries and $102,000 for health care costs.

On the revenue side, tax income grows by $808,000 and state funding rises $552,000.

However, Manzer pointed out the state funding is pegged for pension costs.

“All the money the state’s giving to us is going to pensions,” he said. “The pension system is not broken. The problem is it was underfunded. The time has come to pay the bill.”

Manzer said there would be $500,000 in savings due to a variable debt rate to help close the overall funding gap.

There are no retirement savings for the next school year.

Manzer said the budget was prepared using actual costs, not allocations.

“Nobody gets a free pass,” he said about separate department budgets. “We hold everybody accountable.”

Manzer said there is no padding in the budget.

“I’m not going to add any fluff in my budget,” he said.