JEFFERSON TWP — South Butler School Board members voted unanimously Wednesday night to approve a $37.2 million budget that keeps the property tax rate steady for the coming fiscal year, but will draw heavily on the district's fund balance to plug a deficit of nearly $2 million.

Board members voted 8-0 to advertise the preliminary budget, which must be put up for public review for 30 days before it can be finalized. The preliminary document sets revenues at $35.6 million for the year, and keeps the property tax rate at 94.275 mills.

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

Expenditures for the 2017-18 year are set at $37.2 million, with more than $1.5 million from the district's fund balance expected to be used to plug the budget gap.

The most significant financial pressure on the district for the coming year will be the state-mandated rise in required contributions to the state teachers retirement system (PSERS). South Butler will pay $2.25 million into the system next year, according to figures provided by the district.

But revenue drawn from the district's fund balance — which currently sits at about $7.7 million — will go mostly toward non-recurring capital projects and educational technological improvements.

Those include a $300,000 project to replace a cooling tower and compressors at Knoch High School; $100,000 in upgrades to the high school's cafeteria serving line; $52,500 that will go to upgrade seats in its auditorium; and more than $100,000 in outdoor and indoor improvements at the district's intermediate school.

In total, the district expects to spend more than $656,000 on capital projects for the 2017-18 year, according to its preliminary budget.

Superintendent David Zupsic said the district does not intend to eliminate any educational course offerings or programs next year.

“In fact, courses and programs that are popular with students will be expanded,” he said.

School board president Nelda Burd said the district continues to work towards a contract with its teachers union as the budget process continues.

“In the midst of these financially difficult times, the board continues to try to obtain affordable employment contracts that are fiscally responsible and fair to its teachers and supports employees and taxpayers,” she said.

As of Wednesday night, district solicitor Tom Breth said no new bargaining dates between the teachers union and the district had been scheduled. The two sides have been in negotiations for nearly three years.