BUTLER TWP — The new 2016-17 budget for the Butler School District is the third one proposed and it has cut the projected deficit from $6.9 million to $3.9 million.

The budget has $99.3 million in revenue and $103.2 million in expenses, and the maximum property tax increase allowed by the state, a 3-mill increase to 97.8 mills.

At 94.8 mills, the average property owner pays $1,696 per year. At 97.8 mills, that would rise $53 to $1,749, according to Deborah Brandstetter, director of business services.

In total, the tax increase would give the district an additional $1.3 million.

The proposed budget shows a decrease in wages by $979,000, but the district projects about $73.2 million in salaries and wages for next year.

This decrease includes not replacing a retiring science teacher at the secondary level and eliminating an extra kindergarten teacher position that is typically budgeted in case kindergarten numbers are high, Brandstetter said.

But eliminating that kindergarten position is not recommended by Mary Wolf, assistant superintendent of elementary education.

The district also cut expenditures by reducing supply allotments $68,862, down to $1 million. For this school year, $1 million was budgeted for supplies, with current projections expected to be $960,000.

The proposed budget also eliminates buying new band uniforms, budgeted at $155,000, but it does include $12,000 for new Sequinette uniforms.

It also funds Japanese classes and Junior ROTC, two programs that had been discussed as possible cuts.

In addition, the district is looking to finance a $1.3 million technology upgrade, which will add smart boards in every classroom from kindergarten to third grade.

Through financing, the district would only pay $113,000 in the next school year for that project.

Brandstetter said the district’s options to cut costs are few.

“While we have a deficit of $3.9 million. The areas where we can reduce costs are limited when you look at what is a contracted type of expense,” she said.

Salaries and benefits make up about 71 percent of the budget, contracted professional services are typically 3 percent, transportation and outside tuition are 6 percent each, and the debt service is another 8 percent.

Utility costs make up 1.6 percent, and supply costs are about 1 percent.

Board member Bill Halle also commented on how much of the budget is non-negotiable.

“Over 80 percent of the budget we’re looking at, we don’t impact,” he said. “That only leaves 20 percent that we do impact, and we really don’t because a good percentage of that is contracted and other things that are out of our control.

“When you look at that and try to make a cut that you need to do to try and make up for our deficit it is just not real life.”

For that reason, Halle suggested that staffing changes would be the best way to reduce the deficit.

Currently, the district has $11.4 million in its reserve funds, but after this school year’s projected deficit of $1.4 million, the fund balance will be about $9.9 million.

If next year’s proposed $3.9 million deficit is paid with those reserves, the district will have $6 million remaining.

Board President Nina Teff stressed that having a fund balance can be crucial if problems arise such as this year’s state budget impasse when the district needed to use its reserve funds.

The board has a policy that requires the district to keep its fund balance at 5 percent of the total budget, meaning the district should have a minimum of $5.1 million in its reserves.

That policy also is being discussed as something the board might change.

Superintendent Dale Lumley believes the reserves should be at a 5 percent minimum, but Brandstetter and Halle agree that a 3 percent reserve fund balance would be more appropriate.

No action has been taken on the budget. The next meeting regarding the budget will be at 6 p.m. May 2 at the Harriger Educational Services Center, 110 Campus Lane.

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