JEFFERSON TWP — Property owners in the South Butler County School District will have a tax increase under the preliminary 2016-17 district budget.

The school board has approved the budget with a one mill property tax increase that will raise taxes $21 a year for the average property owner, according to Paul Slomer, director of business affairs.

The current tax rate is 93.275 mills.

The one-mill tax increase would generate another $169,000 for the district, Slomer said.

Total revenue is projected at $34.5 million, with $20 million coming from local revenue. Of that local revenue, property taxes account for about $15.2 million, Slomer said.

The district has also projected slightly higher amount for state funding of about $14 million annually.

While total revenue is up about 1.7 percent, expenditures have increased to $36.5 million, Slomer said. For 2016-17, salary and benefits will account for 66 percent of the budget, with benefits alone increasing by $900,000, he said.

The district’s payment to the state for the Pennsylvania State Employees’ Retirement System will increase $870,000 in the next school year, bringing the school’s state-mandated amount up to $4.3 million, Slomer said, calling that cost “a significant burden” that the school cannot change. While the state will reimburse the district for about half of the payment, the district will still pay a net of $2.2 million.

With taxes planned to increase by one mill, the district anticipates a $1.5 million deficit, Slomer said. Had taxes been raised to the maximum, that deficit would still be at $1.4 million.

A press release passed out at the meeting said, “... the fund balance would be used to make up the remaining budget deficit.” Slomer said he did not know how much would remain in the fund balance with a one-mill tax hike, but said that with no tax increase, the district would have an estimated $4.1 million fund balance after the 2016-17 school year.

The board will have a final vote in June as the district is required to pass a budget by June 30.