FOXBURG, Clarion County — The Allegheny-Clarion Valley School Board may face some tough budget decisions in the coming months.

The board took a cursory look at 2006-07 district spending and saw inflated teacher retirement contributions and energy bills.

"The budget may be more challenging than in previous years," Pat Lukasavich, superintendent, said.

He provided the board members with projections for contributions made to the Pennsylvania State Education Retirement System based on percentages provided by the state. Next year the district's payments to the retirement system will increase $45,597.

Revenue based on current tax rates will increase $37,491.

Next year isn't the only year the state projects a climb in retirement contributions. The numbers projected for the 2012-13 school year would mean a $457,360 increase in Allegheny-Clarion Valley payments to the system during a single fiscal year.

The state makes contributions to the system equal to the district's payments. Lukasavich said he is worried that when the state encounters huge increases in retirement contributions it will pull funding that would otherwise go to the district.

The increase in employees' contributions remains a steady 7.5 percent until the 2015-16 school year.

Also a concern to Lukasavich is the rocketing natural gas bills. The December bill nearly doubled — to $22,160 from $11,140 — for the same month in 2004.

The district also saw a $4,000 increase in the November gas bill compared with the previous year.

If the trend continues, Lukasavich said, the district could have a nearly $80,000 deficit between the budgeted natural gas cost and the actual cost.

That deficit would need to be carried to the next budget and paid.

"You put it all together and we're down $88,000, without considering other factors," Lukasavich said.

He said districts across the state are facing similar problems. The assessed property value of Foxburg has increased $615 from 2005, and the value of Richland/Clarion decreased.

Across the district, assessed property value increased to $144.1 million from $141.6 million.

"I think the budget will be a challenge," he said. I don't think it will be alarming."