BUTLER TWP — The Butler School District will have an estimated $4.2 million deficit for the 2016-17 school year, even with a property tax increase, according to the budget passed Monday night by the school board.

To cover that deficit, the district will use about 40 percent of its $10.5 million reserve fund balance, leaving $6.3 million.

The final budget includes $100.1 million in revenues and $104.3 million in expenses, according to Deborah Brandstetter, director of business services.

On the revenue side, the district will receive an estimated $49.8 million as local revenue, which is 49.6 percent of the budget.

This local revenue includes the 3-mill tax hike, the maximum allowed by the state. This would make the district’s real estate tax rate 97.8 mills, up from the current rate of 94.8 mills.

The tax hike will cause the average property owner to pay $1,749 a year, up $54 from $1,696 now, said Brandstetter. In total, the tax increase would give the district an additional $1.3 million.

Another 47.8 percent of total revenue comes from state revenue, an anticipated $48 million. This school year, the district received $46.3 million from the state.

On the expense side, roughly $72.7 million will be spent on salaries and benefits. Another $13.1 million will go for services, such as transportation.

For the 2016-17 school year, the district will have an increase of $804,500 for its retirement fund, bringing the total cost to roughly $12.9 million, but it will receive a state reimbursement of $7.4 million.

The budget also includes capital projects totaling $343,000. This includes new sidewalks and curbs at the Butler Middle School and Northwest Elementary School where buses drop students off. At Center Township Elementary School, the district will add about 56 parking spaces.

Board member Bill Halle previously said the tax increase more than covers the district’s increasing costs for the state pension costs, and he voted against the increase Monday along with board member Neil Convery.

Both Halle and Convery voted against the total budget, which passed by a 7-2 vote.

Halle said he could not justify voting for a budget that did not address the future limitations the district will have when budgeting in the coming years.

“I am just uncomfortable continuing to raise taxes on a community that’s struggling financially,” he said. “We have to get to a point where we discuss what we’re going to cut,” saying that the district must learn to budget “within what (it) can afford.”

According to Convery, the budget included a large technology purchase, a $1.3 million upgrade that will add smart boards in kindergarten to third-grade classrooms and expand wireless access networks.

“When we’re adding (technology on) multiple grade levels when we’re in such a deficit, I just don’t think that’s a wise move to do with our budget,” Convery said.

Board member John Conrad, who voted for the budget, also said he is not entirely pleased with the district’s financial state but stressed that much of that is driven by decisions made by the state.

“No one is ever really pleased with a tax increase, no one,” Conrad said. “But on the other hand, the cards that the state of Pennsylvania has dealt us is equivalent of raising the price of gas from like $4 a gallon about seven or eight years ago to about $32 a gallon, in that short period. For us, the voters and the constituents have every right to be upset. But it’s not the school board they should be upset with. They should be upset with their legislators ...(the state) require(s) us to buy the pension plan and they’re the ones who control the price. We don’t have a choice. If we could go to another pension system, we would.”

The district is required to pass a final budget by June 30.