For all the variables that exist surrounding Shamokin Area School District's budget for next school year, there appears at least one certainty - property taxes will rise for the first time in 20 years.
For the seven other public school districts in which Northumberland County residents reside, it's been quite another story during that time.
Since Shamokin Area's rate last increased, in 1992, there have been a combined 93 property tax increases among the other seven districts - including 43 in the past seven years.
The county itself made a pair of changes in its assessment ratio over the past two decades, and while Shamokin Area's millage rate was adjusted, residents' tax bills remained steady.
On Jan. 25, the district's board of directors adopted its preliminary budget with a projected millage rate of 26.4195, up from the current rate of 25.75.
The increase is minimal, just 2.6 percent, but is also telling of the challenges the district faces as its directors attempt to erase a estimated $4.6 million shortfall.
Some have wondered what a gradual rate increase would have meant for Shamokin Area's estimated budget deficit. Steve Curran, district business manager, said during the Jan. 25 board meeting that if taxes had been raised 1 mill each of the past 20 years, the result would have been about $2 million in additional tax revenue for the 2012-13 school year.
Districts' hikes
In the past, Pennsylvania school boards could have conceivably made up any deficit with a tax increase. That all changed in 2006 when restrictions tempering tax hikes were established.
Under current law, a school board can raise taxes only as high as the rate of inflation; 2.6 percent for Shamokin Area in 2012.
If a tax hike exceeding that index were desired, it must be put to referendum for voter approval.
One option to circumvent referendum and raise taxes above the inflation rate is for school boards to petition the state for certain specific exceptions regarding school construction, special education and retirement contributions.
Danville Area and Shikellamy had 16 tax increases in Northumberland County over the past 20 years, tied for most among all eight schools. Milton Area had 14 tax increases, Line Mountain and Warrior 13 apiece, Southern Columbia Area had 12 and Mount Carmel Area had nine, six of which occured in the past seven years.
It should also be noted that Southern Columbia Area, Warrior Run and Milton Area all had years with varying decreases in their respective property tax rates since 1992.
Collecting taxes
Real estate taxes are levied against a property's fully assessed value. Each mill equals $1 for every $1,000 of the assessment.
A property within Shamokin Area assessed at $20,000 would be taxed $515 under the current rate; $528.39 under the proposed rate for the 2012-13 school year.
A single mill of real estate tax generates approximately $94,500 revenue for Shamokin Area, considering the district's 84-percent collection rate.
The proposed rate increase of 0.6695 mills would create $63,920 revenue.
The district's collection rate is comparable to that of Mount Carmel Area's, estimated between 80 and 85 percent. The remaining districts in which county residents reside all have collection rates of at least 92 percent.
Danville Area's millage is the most valuable, where a single mill generates $830,000 revenue for the district. Line Mountain's is lowest among county schools at $63,962.
Dwindling funds
Shamokin Area long appeared on fiscally sound ground. In fact, its fund balance - money carried over from one school year to the next - exceeded $10.3 million just four years ago.
Over the past four years, however, the district has had four straight budget deficits surpassing a combined $7.9 million, according to district paperwork, all of it erased at least in part using the fund balance.
That Shamokin Area went 20 years without a tax increase was pretty unusual, said Jay D. Himes, executive director of Pennsylvania Association of School Business Officials. Without specifics to reference, he estimated the district had sound, frugal management to maintain its steady tax rate for so long.
But when a school district continually uses its fund balance to balance its budgets, Himes said it runs the risk of creating a structural deficit.
"You essentially remove that entire safety blanket for anything happening that's unanticipated," he said.
A fund balance is in place as a contingency, for the most part, to cover any unforeseen expenditures a district may encounter, Himes said. He suggested a district maintain a fund balance of at least 5 percent of its budget.
Shamokin Area is hardly alone in using its fund balance to erase its debt. Himes said his organization has found that seven of 10 Pennsylvania school districts are doing the same.
The financial straits many districts encountered, he said, is partially the result of revenue shrinking across the board - federal, state and local.
Districts are also facing enormous increases in contributions to members of the Public School Employees' Retirement System over the next three years.
Himes said the contribution rates statewide will rise 3.5 percent next school year, followed by a pair of 4.5 percent hikes each of the next two school years. One percentage point represents about $125 million statewide, he said.
"In some cases, he said, "districts won't have enough taxing revenue to make up for the increasing costs of pensions."
Steve Robinson, director of publications and public relations for Pennsylvania School Boards Association, said streaks such as Shamokin Area's can be predicated by the wants of a district's constituents.
He wouldn't offer any opinion on the prudence of the move, but did say that long stretches where taxes aren't raised is not unprecedented, saying much of that is a result where an area's tax base is growing.
"Raising taxes should be a local decision," Robinson said, "and the community elects school directors to make those difficult decisions."