ADAMS TWP — School board directors at Mars Area School District voted 6-2 to approve the final 2024-25 budget at a meeting Tuesday, June 18, with a tax increase of 3.474 mills.

Kevin Hagen, Anthony DePretis, Sallie Wick, Jennifer DiCuccio, LeAnn Riner and Justin Miller voted in favor of the budget. John Kennedy and Aaron Rose voted in opposition. Daniel Long was absent.

The budget of $62,725,076 includes an increase in expenditures of more than $3.8 million and a deficit of $954,000.

Before the vote, board director Aaron Rose suggested suspending the proposed tax increase and using money from the fund balance to cover the deficit. He said he agreed with the proposed budget and the expenditures listed, but not with the proposed tax increase built in.

“I think it would be prudent for us to use the surplus fund for what it is designed to do,” Rose said.

Business manager Debbie Brandstetter said the fund balance is being used to balance the budget. The millage increase will be used to cover part of the cost in health care premiums, which will rise by 20.68%. Two mills will also go toward half of the district’s debt service payments as Mars Area School District embarks on a $24 million elementary school expansion project.

“If we wait until next year, my concern is that we may not have enough capacity available to raise the taxes to cover the full debt service payments,” Brandstetter said.

“We also have quite a few projects that are coming up — not just this (elementary school) building,” Wick said. “We need to understand how many other projects we need to have funding available for.”

Additionally, Brandstetter noted that shrinking the district’s fund balance could affect its bond rating, which could lead to higher interest rates.

“In 11 years, this is our third increase,” Hagen told the board before the vote. “We don’t take it lightly that we’re raising taxes because we don’t like to do it. As Debbie pointed out, there’s two main drivers for this: the biggest one is the fact that we have a built expansion that must take place — it’s not optional. We don’t have $25 million sitting on the couch to pay for it ... it has to come from somewhere.”

“Unfortunately, the only knob we have is local real estate taxes,” Hagen said.

In the event the district receives more funding with the adoption of Gov. Josh Shapiro’s budget, Hagen said a likely possibility would be a tax increase would not be needed next year.

The approved tax increase would bring the millage rate from 105.526 to 109.00.

For the average homeowner, the tax increase would come out to nearly $100 a year, Brandstetter said after the meeting.

Homestead property owners approved by the state will receive a $88 annual reduction in taxes based on the assessed value of their property; farmstead property owners will receive a $121 tax reduction.

“It’s a tough decision that we choose to raise taxes, but as you know, we’re growing exponentially,” superintendent Mark Gross said after the vote.

Tuesday evening, board directors agreed to appoint Matthew Duff to the school board. Duff will fill the vacant seat left by Sallie Wick, whose resignation was approved May 23. He was chosen unanimously by the school board out of 14 candidates who were interviewed due to a previous vacancy six months ago. Duff’s term will begin July 1 until the school board’s reorganization meeting in early December. Wick’s term ends July 30.