The Karns City School Board is proud that it has avoided a real-estate millage increase for the twelfth consecutive year, and it should be. Tax increases haven't been a stranger to Butler County school districts over the past dozen years.

But by opting against a tax hike this year, Karns City school directors set the stage for needing even-tighter budget controls than have been otherwise necessary. With the board's decision to transfer $1.6 million from the district's budgetary reserve rather than raise taxes, the district will be left with only $80,783 in the reserve account. That's a very small financial cushion.

Many districts strive to maintain a reserve fund equal to 5 percent to 10 percent of their budgets. Although some districts have chosen to drop below what they regard as their ideal reserve figure, the projected Karns City reserve is below one-half of one percent of the 2004-05 spending plan.

Barring some inflow of unanticipated revenue during the new fiscal year, which began Thursday, the district could be hard-pressed to find the money if a big unbudgeted expense, such as a major heating system breakdown, confronted the district.

The board and administrative staff apparently are comfortable that the district has the financial capacity to deal with such an event, if one were to occur. Either that, or they are comfortable with the condition of the district's facilities.

A 2.7 percent increase in 2004-05 projected spending is part of what is being covered by the $1.6 million that will be transferred. Beyond that, a long-term concern of the district's administration, according to Boyd Hillwig, business manager, is the trend of district expenses increasing 4 percent a year while revenue is increasing at only a 3 percent rate.

Still, a major upbeat part of the district's finances is the stability of the fund used to pay future retirement and risk-management liabilities. That fund totals $1.48 million - all of which was carried over from the 2003-04 fiscal year.

The board originally transferred that amount to the fund from the general fund budget at the end of the 2002-03 school year.

The district's ability to avoid a millage increase for so many years is indicative of excellent fiscal management. But the less-than-robust status of the reserve fund raises the question of whether the 2005-06 fiscal year will be "Lucky 13" for holding the line on millage, or something more in line with "Friday the 13th."

Presumably, if the no-millage-increase string is broken after the current fiscal year, which will end on June 30, 2005, only a modest increase will be necessary, considering the district's demonstrated cost-consciousness.

Karns City taxpayers have been lucky. Many other taxpayers haven't experienced such good fortune.

- J.R.K.